JPMorgan reached a preliminary settlement to pay $500m to resolve a lawsuit over $17.6bn of faulty mortgage-backed securities issued by Bear Stearns, according to a person familiar with the agreement who asked not to be named because the information isn’t public.
Bloomberg News reports that a group of pension funds which sued over the securities said in a court filing last week that the 'settlement in principle' isn’t final and the parties plan to seek preliminary approval by February 2.
The pension funds, led by the Public Employees’ Retirement System of Mississippi and the New Jersey Carpenters Health Fund, sued in September 2008 in Manhattan federal court over the securities, which Bear Stearns issued in 2006 and 2007.
In 2012, JPMorgan Chief Executive Officer Jamie Dimon said he did the U.S. a favour by buying Bear Stearns and that he might not go through with it again because of how much the deal ultimately cost.
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