Bloomberg News

Principal Life Sues JPMorgan Over Mortgage-Backed Securities

March 02, 2012

JPMorgan Chase & Co. was sued by a Principal Financial Group Inc. (PFG) unit, which accused the bank of making false statements in connection with the sale of $114.9 million in residential mortgage-backed securities.

Principal Life Insurance Co., a unit of the Des Moines, Iowa-based seller of insurance and retirement products, accused New York-based JPMorgan Chase of making “misrepresentations and omissions” about the mortgage loans that were pooled together into the securities, according to documents filed in New York state Supreme Court yesterday.

Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.

Jennifer Zuccarelli, a spokeswoman for JPMorgan Chase, didn’t immediately respond to a telephone message left at her office seeking comment on the lawsuit.

The case is Principal Life Insurance Co. v. JPMorgan Chase & Co. (JPM), 650615/2012, New York state Supreme Court (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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