NY sues JPMorgan over securities
NEW YORK — The New York attorney general’s office has hit JPMorgan Chase with a civil lawsuit, alleging that Bear Stearns perpetrated massive fraud related to residential mortgage-backed securities that it sold prior to its 2008 collapse and subsequent sale to the New York bank.
The suit is the first to be filed under the auspices of the RMBS Working Group, set up by President Barack Obama to investigate and prosecute alleged misconduct that contributed to the financial crisis.
NY AG Eric T. Schneiderman alleges that Bear Stearns led investors to believe that the loans in its RMBS portfolio had been carefully evaluated and would be continuously monitored. But Schneiderman alleges that Bear Stearns failed to do either.
JPMorgan Chase & Co. spokesman Joseph Evangelisti says the bank intends to contest the allegations.