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Investors Recover $388 Million in JP Morgan MBS Class Action

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After six years of intense litigation, the lead plaintiffs and court-appointed class representatives of Laborers Pension Trust Fund for Northern California and Construction Laborers Pension Trust for Southern California recovered hundreds of millions of dollars regarding nine 2007 residential mortgage-backed securities (MBS) offerings issued by JPMorgan Chase & Co. This brings near closure to one of the last remaining MBS purchaser class actions arising out of the global financial crisis. The law firm Robbins Geller Rudman & Dowd LLP helped recover US$ 388 million in the case for investors. On a percentage basis, the settlement represents one of the largest recovered in any of the 16 comparable MBS purchaser class action settlements obtained to date.

On a percentage basis, the settlement represents one of the largest recovered in any of the 16 comparable MBS purchaser class action settlements obtained to date.

The suit was initially pushed by the US$ 2.1 billion Fort Worth Employees’ Retirement Fund. The investors claimed JP Morgan misled them about the risks (credit quality of home loans) of US$ 10 billion worth of residential MBS. After the demise of investment bank Lehman Brothers, the MBS certificates were worth 62 cents or less on the dollar.

JP Morgan denied wrongdoing as part of the accord. The bank argued the underperformance of the investments were due to the economic downturn rather than the specific assets in the portfolio.

The case is Fort Worth Employees’ Retirement Fund v. J.P. Morgan Chase & Co., 09-cv-3701, U.S. District Court, Southern District of New York.

SWFI First Read, September 19, 2018

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QIA Eyes Investment in Chinese Lender Lufax

The Qatar Investment Authority (QIA) is in talks about a possible investment into Shanghai-based Lufax, one of China’s largest online lenders. The seller of the possible stake is China’s Ping An Insurance (Group) Co. Ltd. Lufax’s official name is Shanghai Lujiazui International Financial Asset Exchange Co. Ltd.

Wealth Funds Back Hotpot Giant

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Japanese Government Capital Provides Initial Life for Texas Bullet Train

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Dallas-based Texas Central Partners, LLC is the developer of a proposed high-speed rail system, dubbed the Texas Bullet Train, between Dallas and Houston. Project costs are estimated between US$ 12 billion to US$ 15 billion. The developer secured US$ 300 million in project loans from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation (JBIC). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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DOJ Investing Tesla Over Musk Comments

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The U.S. Department of Justice (DOJ) is conducting a fraud investigation over Tesla as its CEO Elon Musk made public statements on twitter. This is a criminal probe. In addition, earlier, SWFI reported the U.S. Securities and Exchange Commission (SEC) is conducting a civil inquiry into Elon Musk regarding his statements.

This all surrounds Musk tweeting in August that he was thinking of taking Tesla private and had “funding secured” for the transaction. Both government authorities are seeing if Musk misled investors and violated federal securities laws with his public statements.

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