Two insurers claim JPMorgan caused them over US$1b in losses

New York

JPMORGAN Chase & Co stuffed two investment accounts with risky mortgage bonds almost a decade ago as the housing market started to crumble, lawyers for two insurance companies told a state judge, causing their clients to lose more than US$1 billion.

"They saw steadily increasing risks and bad news and they did nothing in response," said Michael Allen, a lawyer for Ambac Assurance UK Ltd. JPMorgan was reckless for assigning an inexperienced portfolio manager to the accounts who ignored investment guidelines and continued to buy subprime mortgages, despite numerous warning signs, lawyers for the insurers said on Monday during their opening statements.