A group of major financial institutions has lost its bid to block the New Jersey Attorney General’s Office from keeping a whistleblower lawsuit alive after the state Supreme Court ruled that a 2023 amendment to the New Jersey False Claims Act applies to pending cases.
The unanimous decision clarifies how the attorney general can participate in whistleblower lawsuits filed on behalf of the state. Before 2023, the attorney general generally had to formally intervene in a case to prevent it from being dismissed under a legal rule known as the public disclosure bar, which barred lawsuits based solely on information already public. The amendment created a simpler option, allowing the attorney general to oppose dismissal without taking over the litigation. The Supreme Court ruled that the change applies to lawsuits that were already pending when the law took effect.
The case stems from a lawsuit filed by Edelweiss Fund LLC, which alleges JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, and related companies defrauded New Jersey by improperly setting interest rates on variable-rate municipal bonds. The banks deny the allegations. The Supreme Court did not decide whether the fraud claims are true. Instead, it addressed a procedural question that could affect future whistleblower lawsuits brought under the...
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