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JP Morgan Chase sued for fraud on mortgage-backed securitiesOctober 2, 2012 New York’s top prosecutor opened a new front in efforts to hold banks accountable for the financial crisis by filing a civil lawsuit against J.P. Morgan Chase & Co., alleging widespread fraud by the company’s Bear Stearns unit in the sale of mortgage-backed securities. The case is the first to be brought under the aegis of a group of federal and state prosecutors and regulators formed by President Barack Obama in January. If successful, the lawsuit could point the way to significantly more financial pain for the big banks, which face threatened government actions and numerous investor lawsuits tied to mortgage securities that soured in the crisis. Since 2008, state and federal regulators have launched dozens of probes to determine whether banks broke securities laws or were simply guilty of errors of judgment. Regulators have achieved some record-breaking penalties and investors have secured some significant victories. Bank of America Corp. agreed Friday to pay $2.43 billion to settle claims it misled investors about the acquisition of Merrill Lynch & Co., in the largest shareholder class-action settlement tied to the meltdown. BofA didn’t admit wrongdoing. At the same time, regulators have been criticized for their failure to bring enforcement actions in relation to some of the biggest blowups in the crisis, such as the collapse of Lehman Brothers Holdings Inc. William Black, a former bank regulator, said Monday’s civil action showed “a continuation of the failure of leading prosecutors to bring a criminal case against any of the elite players.” The complaint filed Monday in New York state court by Eric Schneiderman, the state’s attorney general, seeks an unspecified amount of damages related to billions of dollars in losses. It is the first action from the Residential Mortgage-Backed Securities Working Group, which cites some $22.5 billion of losses suffered by investors in securities issued by Bear Stearns Cos. in 2006 and 2007, before the New York investment bank nearly collapsed in March 2008 and was taken over by J.P. Morgan. The lawsuit alleges that Bear Stearns defrauded investors by packaging up and selling on mortgages that it knew—or should have known—were highly likely to default. J.P. Morgan Chase spokesman Joseph Evangelisti said the bank intends to contest the allegations, and that it is “disappointed” the New York attorney general “decided to pursue its civil action without ever offering us an opportunity to rebut the claims.” Source It’s unbelievable that it’s still a widespread question as to whether the financial crisis was brought about by illegal wrongdoing or errors in judgement. Banks will do anything to make money, including exploiting the entire country into the worst recession since the Great Depression. 

JP Morgan Chase sued for fraud on mortgage-backed securities
October 2, 2012

New York’s top prosecutor opened a new front in efforts to hold banks accountable for the financial crisis by filing a civil lawsuit against J.P. Morgan Chase & Co., alleging widespread fraud by the company’s Bear Stearns unit in the sale of mortgage-backed securities.

The case is the first to be brought under the aegis of a group of federal and state prosecutors and regulators formed by President Barack Obama in January. If successful, the lawsuit could point the way to significantly more financial pain for the big banks, which face threatened government actions and numerous investor lawsuits tied to mortgage securities that soured in the crisis.

Since 2008, state and federal regulators have launched dozens of probes to determine whether banks broke securities laws or were simply guilty of errors of judgment. Regulators have achieved some record-breaking penalties and investors have secured some significant victories. Bank of America Corp. agreed Friday to pay $2.43 billion to settle claims it misled investors about the acquisition of Merrill Lynch & Co., in the largest shareholder class-action settlement tied to the meltdown. BofA didn’t admit wrongdoing.

At the same time, regulators have been criticized for their failure to bring enforcement actions in relation to some of the biggest blowups in the crisis, such as the collapse of Lehman Brothers Holdings Inc. William Black, a former bank regulator, said Monday’s civil action showed “a continuation of the failure of leading prosecutors to bring a criminal case against any of the elite players.”

The complaint filed Monday in New York state court by Eric Schneiderman, the state’s attorney general, seeks an unspecified amount of damages related to billions of dollars in losses. It is the first action from the Residential Mortgage-Backed Securities Working Group, which cites some $22.5 billion of losses suffered by investors in securities issued by Bear Stearns Cos. in 2006 and 2007, before the New York investment bank nearly collapsed in March 2008 and was taken over by J.P. Morgan. The lawsuit alleges that Bear Stearns defrauded investors by packaging up and selling on mortgages that it knew—or should have known—were highly likely to default.

J.P. Morgan Chase spokesman Joseph Evangelisti said the bank intends to contest the allegations, and that it is “disappointed” the New York attorney general “decided to pursue its civil action without ever offering us an opportunity to rebut the claims.”

Source

It’s unbelievable that it’s still a widespread question as to whether the financial crisis was brought about by illegal wrongdoing or errors in judgement. Banks will do anything to make money, including exploiting the entire country into the worst recession since the Great Depression. 

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  13. dikdur reblogged this from thepeoplesrecord and added:
    Fail on the too big to fail banks’ part. Fail.
  14. thepeoplesrecord posted this

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