* Judge says lacked jurisdiction to hear case
* 99 pct of potential $774 mln damages had been tossed
* Dexia lawsuit returned to NY state court where it began
May 17 A federal judge has revived a closely
watched lawsuit accusing JPMorgan Chase & Co of
misleading Belgian-French bank Dexia SA into buying
more than $1.6 billion of troubled mortgage debt.
Citing a recent federal appeals court decision, U.S.
District Judge Jed Rakoff in Manhattan said he had lacked
jurisdiction when he threw out much of the lawsuit on April 2.
That ruling dismissed claims for all but $5.7 million of the
roughly $774 million of damages that Dexia sought.
In his new ruling, the judge directed that the Dexia case be
moved to the New York state court where it was originally filed.
Dexia and JPMorgan representatives did not immediately
respond to requests for comment.
The lawsuit is one of many accusing banks of trying to boost
profit by packaging low-quality mortgages into seemingly safe
securities, while hiding the risks or failing to ensure that the
loans were underwritten properly.
Dexia alleged it was fraudulently misled about the quality
of 65 residential mortgage-backed securities certificates it
bought from 51 offerings between 2005 and 2007 by JPMorgan, Bear
Stearns Cos and Washington Mutual Inc. JPMorgan bought Bear and
most of WaMu in 2008.
The case gained notoriety after emails and other materials
were disclosed that suggested that the defendant banks had been
selling RMBS they knew were toxic.
JPMorgan argued that all of the alleged misstatements in
Dexia's complaint were located in a prospectus or prospectus
supplement, and that there was no showing that alleged fraud
caused any of the alleged losses.
The case is Dexia SA/NV et al v. Bear Stearns & Co et al,
U.S. District Court, Southern District of New York, No.