COMPLAINT | New York Attorney General Sues JPMorgan Chase for Fraud

JPMorgan Chase Lawsuit By New York AG A First For White House Task Force

The New York Attorney General sued JPMorgan Chase on Monday, alleging that Bear Stearns, the troubled investment bank it bought in 2008, “kept investors in the dark” about the quality of the mortgage-backed bonds it was selling as the market started to sour.

The lawsuit is the first legal action against a Wall Street bank to come from a joint federal and state task force announced by President Barack Obama during his State of the Union address in January. It alleges civil fraud violations, which means that potential penalties will be measured in dollars, not jail terms. Nevertheless, the JPMorgan Chase lawsuit qualifies as one of the more significant actions taken by a law enforcement agency to date against a Wall Street bank.

According to the lawsuit, filed in Manhattan federal district court, Bear promised a “robust and intensive” review process for selecting loans for sale to investors. But Bear didn’t do that, according to the complaint. In order to continue the securitization machine — the packaging and sale of home loans to investors — the bank increasingly placed risky loans into the bonds, even as an outside contractor it had hired to evaluate those loans was warning the bank about their poor quality.

Rest here…

Copy of the complaint below…




One Response to “COMPLAINT | New York Attorney General Sues JPMorgan Chase for Fraud”
  1. Jason Werner says:

    JP Morgan would have a pretty good argument too if they sued the AG for fraud.

Leave a Reply