Pension Fund Securities Lawsuits: JPMorgan to Face MBS Case, PERSM Files Class Action Case, & Institutional Clients Can Sue BP

JPMorgan Ordered to Face $10B Mortgage-Backed Securities Case
A federal judge said that JPMorgan Chase & Co. (JPM) must face a class action securities fraud lawsuit filed by investors accusing the bank of misleading them about the risks involved in $10B of mortgage-backed securities that they purchased from the firm prior to the financial crisis.

U.S. District Judge Paul Oetken certified a class action as to the bank’s liability but not for damages. He said it wasn’t clear how investors were able to value the certificates they purchased considering that the market hadn’t been especially liquid. He did, however, say that the plaintiffs could attempt again to seek class certification on class damages.

The class in this securities case is made up of investors in certificates from nine trusts established by JPMorgan for an April 2007 offering. The lead plaintiffs are the Construction Laborers Pension Trust for Southern California and the Laborers Pension Trust Fund for Northern California.

Mississippi Pension Fund Files Class Action Securities Case
The Public Employees’ Retirement System of Mississippi is helming a class action securities case accusing Millennial Media Inc. that alleges Securities Exchange Act of 1934 violations. PERSM contends that Millennial Media and a number of other entities, including Oppenheimer & Co. (OPY), Morgan Stanley & Co. (MS), Stifel Nicolaus & Company (SF), Goldman Sachs & Co. (GS), Allen & Company LLC, and Barclays Capital Inc. (BARC) concealed information that didn’t reflect well on Millennial. The pension group says that once the data became public, the company’s stock fell.

Millennial Media started its initial public offering on March 28, 2012, selling, along with certain shareholders, over 11.7 million shares to make aggregate gross proceeds of over $152 million. With a second stock offering six months latter, Millennial and its shareholders made aggregate gross proceeds greater than $162 million from another 11.5 million shares.

The plaintiffs believe that the defendants made misleading and materially false statements and omissions that caused Millennial’s common stock to be offered and traded at artificially high prices during the class period. When the truth about the company’s operations and prospects became clear, Millennial’s common stock dropped 86.56 percent from its high price during the class period, causing significant damages and losses to plaintiffs and other class members.

Institutional Clients can Sue BP for Investment Losses
Earlier this month the U.S. District Court for the Southern District of Texas put out a number of rulings allowing certain institutional clients to pursue securities claims against British Petroleum (BP). The plaintiffs want to get back their investment losses stemming from the Gulf of Mexico oil spill in 2010.

Included among the plaintiffs are U.S. public pension funds, ERISA trusts, limited partnerships, and private and public pension funds in other countries. They claim that BP misrepresented not just its commitment to putting into effect safety reforms in the years leading up to spill but also the extent of the spill when it happened. They want to get back the losses they sustained in BP American Depository Shares and common stock shares from January ‘07 through June ’10.

JP Morgan Is About To Face An Enormous Class Action Lawsuit By Investors, Business Insider/Reuters, September 30, 2014

Class action lawsuit alleges Millennial Media misled shareholders, BizJournals, October 1, 2014

More Blog Posts:
DOJ Charges Another Two Ex-Rabobank Traders Over Libor Manipulation, Institutional Investor Securities Blog, October 16, 2014

JPMorgan Will Pay $614M to US Government Over Mortgage Fraud Lawsuit, Stockbroker Fraud Blog, February 8, 2014

Ex-Ameriprise Adviser Pleads Guilty To Nearly $1M Fraud, Stockbroker Fraud Blog, October 17, 2014