JPMorgan Wins Ruling That Leveraged Loans Are Not Securities (2)

JPMorgan Chase & Co. won a federal appeals court ruling that a $1.8 billion leveraged loan at issue in a court case was not a security, a victory for the banking and private equity industries.

The decision Thursday by the Second Circuit US Court of Appeals in Manhattan came in a securities fraud lawsuit brought by a trustee for note purchasers in a 2014 syndicated loan deal led by JPMorgan. Soon after the notes began trading, the borrower, drug-testing company Millennium Health, ran into legal troubles and filed for bankruptcy the next year.

Loan notes are not currently considered ...