This case alleges violation of the Securities Act arising from J.P. Morgan's sale of mortgage pass-through certificates using false and misleading offering documents. The offering documents failed to disclose, inter alia, that (i) the underwriting standards used by the loan originators had systematically ignored their stated standards; (ii) J.P. Morgan ignored its standards and guidelines when evaluating and acquiring the loans; (iii) the stated appraisal standards were not followed when valuing the properties collateralizing the loans and the corresponding loan-to-value ratios; and (iv) the pre-established ratings assigned to each tranche of Certificates did not reflect the true quality of the loans.
On March 26, 2008, a complaint was filed against J.P. Morgan and its related entities in New York State Court, Nassau County, captioned Plumbers' & Pipefitters' Local #562 Supplemental Plan & Trust and Plumbers' & Pipefitters' Local #562 Pension Fund v. JP Morgan Acceptance Corporation I, et al., 08-cv-1713 (the "J.P. Morgan Action"). On January 8, 2009, following a stipulation to removal to federal court, the plaintiffs in the J.P. Morgan Action issued a PSLRA notice. MissPERS filed its motion for appointment as Lead Plaintiff on March 23, 2009. Iron Workers Mid-America Pension Plan and the Structural Ironworkers Local Union No. 1 Pension Trust Fund filed a competing motion for appointment as Lead Plaintiff.
On November 24, 2009, Judge Edward R. Korman entered an order adopting Magistrate Judge William Wall's Report and Recommendation that MissPERS be appointed sole Lead Plaintiff. On March 8, 2010, Lead Plaintiff filed the Consolidated Class Action Complaint and on May 7, 2010, Defendants filed motions to dismiss. Lead Plaintiff opposed the motions on June 21, 2010.
On December 13, 2011, Judge Korman issued an order on Defendants' motion to dismiss. The court sustained MissPERS' Section 11 and 15 claims that the offering documents for five securities which MissPERS purchased contained untrue statements and omissions regarding underwriting and appraisal standards. The Order also adopted the conclusion of two recent out-of circuit cases, and held that MissPERS did not have standing to assert the claims of other investors that purchased in the same offerings. On January 11, 2012, Lead Plaintiff filed a motion requesting that Judge Korman modify the Order to include a certification for interlocutory appeal on the standing issue.
