On February 2, 2015, Cohen Milstein filed a motion for preliminary approval of a proposed settlement in a class action litigation arising from Bear Stearns' sale of $27.2 billion of mortgage securities that proved defective during the recent U.S. housing and financial crises.
J.P. Morgan Chase, which bought Bear in 2008, will pay $500 million, plus up to $5 million in expenses, to investors led by a group of pension funds. The accord, which requires court approval, was disclosed in a filing with the U.S. District Court in Manhattan.
The proposed settlement resolves claims that Bear violated federal securities laws by selling certificates backed by approximately 71,000 largely "Alt-A" mortgages in 22 offerings from May 2006 to April 2007.
Investors said the offering documents contained false and misleading statements about the underwriting guidelines used by Bear's EMC Mortgage unit, Countrywide Home Loans and other lenders, and the accuracy of associated property appraisals.
Cohen Milstein, which was appointed lead counsel in this case in December 2009, represents co-lead plaintiff the New Jersey Carpenters Health Fund as well as additional plaintiffs the Oregon Public Employees Retirement System and the Iowa Public Employees Retirement System.