MBIA shares rise as JPMorgan, Barclays get out of lawsuit
Shares of beleaguered bond insurer MBIA Inc. (MBI) shot up about 14% in trading on the New York Stock Exchange Thursday morning after two banks said they were getting out of lawsuits against the company. Late Wednesday, JPMorgan Chase (JPM) and Barclays (BCS) withdrew claims opposing MBIA's decision to split its muni-bond insurance and structured-finance insurance business into two separate units. In February 2009, MBIA split the operations and a few months later was sued by some of the largest banks in the world, alleging the decision illegally lowered the odds MBIA would pay out on policies the banks had following the failure of structured-finance products. The remaining plaintiffs will continue with the lawsuit, Bloomberg reported Wednesday afternoon. MBIA lost its triple-A rating after the mortgage-related securities it backed tanked in 2008. In early October 2007, the company's stock was trading around $67.50. By the end of February 2008, the stock was down around $12 and on July 11, 2008, MBIA's stock closed at $3.90. Write to Jason Philyaw.