FDIC's Suit Against MBS Underwriters Can Proceed, Judge Rules

FDIC's Suit Against MBS Underwriters Can Proceed, Judge Rules

NEW YORK - A federal judge in New York on Sept. 27 denied JPMorgan Chase & Co. (Chase), Citigroup Inc. and other lenders' motion to dismiss the Federal Deposit Insurance Corp.'s suit, which it filed as the receiver for the failed Colonial Bank, alleging misstatements made in connection with Colonial's purchase of mortgage backed securities (MBS); the judge dismissed the defendants' timeliness argument and found that it is premature to decide the issue of underwriter liability (Federal Deposit Insurance Corp. v. Chase Mortgage Finance Corp., et al., No.12-6166, S.D. N.Y.).

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