N.Y. AG charges J.P. Morgan with fraud

Oct. 1, 2012 at 7:46 PM
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NEW YORK, Oct. 1 (UPI) -- New York's attorney general Monday filed a civil complaint against J.P. Morgan Chase Co. for the alleged fraudulent sale of mortgage-backed securities.

Eric Schneiderman filed the suit -- the first under the authority of a law enforcement group created in January by President Barack Obama to prosecute alleged wrongdoing that caused the 2007-2012 financial crisis -- in New York state court Monday, The Wall Street Journal reported.

"We intend to follow up with similar actions against other sponsors and underwriters" of residential mortgage-backed securities, an official in the attorney general's office told the newspaper.

The lawsuit relates to billions of dollars worth of subprime securities issued by Bear Stearns before it was bought by J.P. Morgan in 2008. It seeks undisclosed damages "caused, directly or indirectly, by the fraudulent and deceptive acts" regarding the "astounding" $22.5 billion in losses from Bear Stearns RMBS issued in 2006 and 2007.

Spokesman Joseph Evangelisti said J.P. Morgan was "disappointed" Schneiderman "decided to pursue its civil action without ever offering us an opportunity to rebut the claims" and said the company would contest the allegations.

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