U.S. District Judge Paul Crotty has decided against JPMorgan Chase & Co. in a lawsuit over losses on securities backed by risky home equity loans, a ruling that could strengthen claims by insurers seeking to hold banks responsible for such losses, Reuters reported yesterday. Judge Crotty said yesterday that Syncora Guarantee Inc., which claimed losses from insuring securities created by JPMorgan's EMC Mortgage Corp unit, need not prove that alleged warranty breaches caused the underlying loans to default in order to force EMC to buy back the underlying loans. The judge also said that Syncora can establish a material breach of contract by showing that breaches of representations and warranties by EMC caused a material increase in risk. He declined to award equitable relief.
