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JPMorgan Chase & Co. was sued by CIFG Assurance North America Inc., which says that it lost more than $100 million on collateralized debt obligations (CDOs) created by Bear Stearns, the investment bank JPMorgan acquired in 2008, Bloomberg News reported yesterday. Bear Stearns stocked the CDOs with toxic mortgage securities and profited by betting against the portfolios, the insurer said in a complaint filed yesterday in New York State Supreme Court. Bear Stearns told CIFG that independent firms had selected the collateral, New York-based CIFG said. "As a result of its fraud, Bear Stearns was able to pass off huge losses onto CIFG," according to the complaint.

Archstone Inc., the biggest property holding of Lehman Brothers Holdings Inc., will be sold to Sam Zell's Equity Residential and AvalonBay Communities Inc. in a deal valued at $6.5 billion, Bloomberg News reported yesterday. Lehman will receive $2.69 billion in cash as well stock in Equity Residential and AvalonBay valued at $3.8 billion, based on closing prices from Nov. 23, New York-based Lehman said yesterday. The deal comes instead of an initial public offering for Englewood, Colorado-based Archstone, which Lehman announced in August. Lehman, which filed the biggest bankruptcy in U.S. history in 2008, left court protection in March.

Bank of America Corp. may limit its exposure to claims by Countrywide Financial mortgage-backed securities investors after a federal judge said that she may have erred two years ago by allowing some claims to proceed, Bloomberg News reported yesterday. U.S. District Judge Mariana Pfaelzer, who presides over the consolidated mortgage-backed securities cases against Bank of America's Countrywide, said in a Nov. 21 order that she no longer believes that the first investor lawsuits filed in California state court case extended the statute of limitation for claims brought subsequently in federal court. "The court is no longer convinced that this conclusion was correct," Pfaelzer said. The reasoning "represents a change in the court's analysis of existing case law." Pfaelzer in two rulings in 2010 and 2011 ruled that investors who had sued over $351 billion in downgraded Countrywide mortgage-backed securities, had only so-called standing to sue over $2.6 billion of the tranches of the securities that they had bought and that had also had been part of the first state court cases filed in 2007 and 2008.

A group of former MF Global customers on Monday asked a court for permission to subpoena the commodities broker's executives, including former CEO Jon Corzine, who was blamed in a congressional report this month for MF Global's collapse, Reuters reported yesterday. The Commodity Customer Coalition, an advocate for trader customers who lost money when MF Global went under, is seeking to subpoena Corzine, Chief Financial Officer Henri Steenkamp, Chief Operating Officer Bradley Abelow and others, according to court papers filed yesterday. While Corzine has stepped down, some executives remain at the company, assisting in its wind-down. Abelow, the highest-ranking executive still at the firm, just last week gave his notice and is leaving at the end of the week.

A report on Residential Capital LLC's pre-bankruptcy transactions with parent company Ally Financial Inc. and others will take about two months longer than planned, said former Bankruptcy Judge Arthur J. Gonzalez, ResCap’s bankruptcy examiner, Bloomberg News reported yesterday. Judge Gonzalez said that he needs until early April to get required documents and to finish interviewing key witnesses. The case is In re Residential Capital LLC, 12-12020, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

State attorneys general of Illinois, New York and Connecticut criticized a Federal Housing Finance Agency proposal to increase lenders' guarantee fees for mortgages in those states, asking FHFA Acting Director Edward J. DeMarco to scrap the plan, Bloomberg News reported yesterday. The state attorneys general yesterday said that they oppose allowing the U.S.-owned mortgage finance companies Fannie Mae and Freddie Mac to increase those fees in states with higher foreclosure costs and longer processing times than average. The FHFA in September proposed the higher fees, which compensate for the companies' risks when they own or guarantee mortgages. "The fee increase would impose a penalty on borrowers in states that offer greater statutory protections to homeowners in foreclosure," the attorneys general wrote to DeMarco.

A bankruptcy judge is giving final approval for Chinese auto-parts maker Wangxiang Group to provide $50 million in bankruptcy financing for battery maker A123 Systems, the Associated Press reported yesterday. A123, which makes lithium ion batteries for electric cars, sought bankruptcy protection last month after receiving more than $130 million of a $249 million Department of Energy grant it was awarded. Milwaukee-based auto-parts maker Johnson Controls Inc. has offered $125 million for the automotive assets of Waltham, Mass.-based A123, which Wangxiang also is eyeing. Bids are due Dec. 4. A123's chief financial officer told an attorney for the U.S. bankruptcy trustee before Monday’s hearing that the company has not received any other bids, but that other parties have expressed interest in the company's non-automotive assets.

Federal regulators are preparing a civil fraud case against a prominent Los Angeles money manager, a government lawyer said at a court hearing on Wednesday, the New York Times DealBook blog reported on Thursday. The manager, Peter J. Eichler Jr., chief executive of Aletheia Research and Management, has received a so-called Wells notice from the Securities and Exchange Commission, an indication that the agency is considering an enforcement action. Gary Leung, an SEC staff lawyer, disclosed the potential lawsuit during a hearing in bankruptcy court. Aletheia filed for bankruptcy protection on Nov. 11, and owes as much as $50 million.

Leanne Spencer, the former controller for Fannie Mae, was dismissed on Nov. 20 from a federal securities class action against the mortgage giant, making her the third former executive to win summary judgment since September, the American Law Daily reported on Friday. U.S District Judge Richard Leon found that the plaintiffs, former Fannie Mae shareholders, failed to present enough evidence that Spencer acted with the intent to deceive. Fannie Mae is accused of manipulating earnings and violating established accounting principles; Spencer individually was accused of making false statements about the company's practices and misleading investors.

Credit Suisse Group AG was sued by New York Attorney General Eric Schneiderman for allegedly deceiving investors in mortgage-backed securities that were sold before the financial crisis, Bloomberg News reported yesterday. Credit Suisse, which last week agreed to settle U.S. claims that it misled mortgage-bond investors, committed "multiple fraudulent and deceptive acts" in promoting and selling the securities, Schneiderman's office said in a complaint filed yesterday in New York State Supreme Court. The lawsuit is an enforcement action by a state-federal task force established earlier this year to investigate misconduct in the bundling of mortgage loans into securities before the housing bust. Schneiderman is co-chairman of the group, which includes officials from the U.S. Justice Department and the Securities and Exchange Commission.