(Updates with JPMorgan response in fifth paragraph.)
Sept. 1 (Bloomberg) -- HSH Nordbank AG sued JPMorgan Chase & Co. to recover damages it incurred after buying $159 million in mortgage-backed securities from the New York bank that allegedly were less safe an investment than advertised.
Mortgage loans underlying the securities posed a greater credit risk and were more prone to default than represented, Hamburg-based HSH Nordbank said in a summons filed yesterday in New York state Supreme Court in Manhattan. Offering materials contained “misrepresentations and omissions” regarding underwriting standards for the loans, it said.
“The securities have performed worse than expected due to the poorer-quality collateral, and defendants’ wrongdoing has led directly to the plaintiffs’ damages,” said the German lender, which was bailed out during the financial crisis.
HSH Nordbank said it’s seeking damages of at least $42 million.
Tasha Pelio, a JPMorgan spokeswoman, declined comment on the lawsuit.
The case is HSH Nordbank AG v. JPMorgan Chase Bank NA, 652416-2011, New York State Supreme Court (Manhattan).
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