FINANCIAL TIMES: JPMorgan Chase has been sued for allegedly defrauding investors who lost more than $20bn on mortgage-backed securities written by Bear Stearns, part of a last push by US authorities to hit banks for their behaviour in the run-up to the financial crisis.
Threatening similar claims against other banks, the office of Eric Schneiderman, New York attorney-general, said Bear Stearns, which JPMorgan acquired in 2008, had “committed multiple fraudulent and deceptive acts in promoting and selling” MBS…
In a 31-page complaint filed in New York state Supreme Court, the attorney-general accused Bear Stearns of having “systematically failed to evaluate the loans” that were packaged into mortgage-backed securities, leading to the inclusion of mortgages on which borrowers were likely to default, and later did, causing investor losses of more than $20bn. The suit seeks the handover of unspecified profits made on the MBS… (more)
