Feds Sue JPMorgan for Mortgage Bond Fraud
Suit: Bear Stearns ignored problems
By Mary Papenfuss, Newser Staff
Posted Oct 2, 2012 1:15 AM CDT
Updated Oct 2, 2012 6:26 AM CDT
JPMorgan vows to fight the suit.   (AP Photo/Mark Lennihan, File)

(Newser) – The mortgage task force of the Justice Department, including New York's attorney general, has launched its first lawsuit—against JPMorgan, charging wide-scale misconduct by Bear Stearns in the selling of mortgage securities. The complaint accuses Bear Stearns, bought by JPMorgan Chase in 2008, of defrauding investors who purchased mortgage securities packaged by the company from 2005 to 2007, reports the Wall Street Journal. The company ignored serious problems with the loans in the securities, the suit states, and made "material misrepresentations" about them, reports Reuters. Investors lost more than $22.5 billion on at least 100 of those securities—a quarter of their original value, according to the lawsuit.

The suit accuses Bear Stearns of institution-wide misconduct that affected numerous deals during the period, reports the New York Times. A JPMorgan spokesman says the company will contest the allegations. “We’re disappointed that the New York AG decided to pursue its civil action without ever offering us an opportunity to rebut the claims and without developing a full record—instead relying on recycled claims already made by private plaintiffs,” said the spokesman, who noted the alleged misconduct predates JPMorgan's purchase of Bear Stearns.

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Showing 3 of 9 comments
Antagonist
Oct 2, 2012 9:56 AM CDT
What a Fucking Joke!!! They will at most get a fine of a few hundred Million! Claw back all those executives and CEO bonuses as well as any shares they were given for Fucking America! I don't fucking care, Put all of them and their families out on the street and deny them any and ALL types of public assistance!!!!
MSCOTTASHLEY
Oct 2, 2012 9:01 AM CDT
Damn, it's about time! Fry the greedy SOB's.
FLGator
Oct 2, 2012 8:43 AM CDT
More bad news/timing for obama. On March 6, 2012 obama unveiled a new JP Morgan bail-out plan. On May 14, 2012, obama stated "JPMorgan is one of the best-managed banks". As if America needs more reasons to evict him from the Oval Office!