In an important case for the trillion-dollar syndicated loan industry, JPMorgan Chase Bank prevailed in its argument that interests in a $1.775 billion loan that was syndicated to sophisticated institutional lenders were not securities under the federal securities laws. In a unanimous ruling issued August 24, the U.S. Court of Appeals for the Second Circuit held that the syndicated loans were not securities.
The case attracted intense interest from the financial community, with an amicus brief submitted by the Loan Syndications and Trading Association, the Bank Policy Institute, the U.S. Chamber of Commerce, and the Security Industry and Financial Markets Association. The industry groups argued that a contrary ruling would defy market expectations, “wreaking havoc” in the market for syndicated loans. As further evidence of the importance of this case, the Second Circuit invited the Securities and Exchange Commission to weigh in, but it declined to do so.
The S&C team representing JPMorgan included Jeff Wall (who argued the appeal), Christopher Viapiano, Ann-Elizabeth Ostrager, Mark Popovsky and Zoe Jacoby.
