JPMorgan Pays $995 Million to Settle Ambac Lawsuits

By Chris Dolmetsch, Bloomberg News

JPMorgan Chase & Co. agreed to pay almost $1 billion to resolve claims by Ambac Financial Group Inc. that it was duped into insuring mortgage bonds backed by shoddy loans, clearing the way for approval of a larger settlement over similar allegations.

Ambac said Tuesday in a statement that the bank will pay $995 million to end two lawsuits the New York-based insurer filed in New York state court in 2011 and 2012 over the quality of loans underlying mortgage bonds sold by Bear Stearns & Co., which was bought by JPMorgan in 2008.

As part of the deal, Ambac agreed to drop ...