GLOBAL – ABP, the Netherlands' largest pension fund, has settled its lawsuit with JP Morgan over losses the fund incurred while investing in mortgage-backed securities.
At the time the suit was filed – almost exactly a year ago at the New York State Supreme Court in Manhattan – a spokesman for the fund alleged the bank had "wrong-footed" ratings agencies, which rated residential mortgage-backed securities (RMBS) as AAA.
In a statement today, the €274bn fund for civil servants said it had "purchased certain RMBS in reliance on false and misleading statements" and that the investment, as a result, was "far riskier" than it had been led to believe.
The statement noted that the settlement did not infer any admission of guilt on part of JP Morgan, which had "denied and continues to deny these claims."
The fund added: "ABP is very content to have reached this settlement – almost within a year of filing the complaint – and is pleased that [JP Morgan] was willing to reach a mutually satisfactory conclusion of this litigation."
The case is not the first time ABP sued over investments in RMBS; it most recently launched a suit against Morgan Stanley over its sale of RMBS.
In August last year, the fund saw its case against Countrywide financial over "hundreds of millions" in losses dismissed.
A month later, in September of 2011, it launched a lawsuit over "misleading statements" Deutsche Bank made regarding RMBS, and in early January it sued Goldman Sachs, alleging the company was aware collateralised debt obligations (CDOs) sold to the fund "did not deserve an AAA rating".
JP Morgan did not reply to a request for comment at time of publication.