JPMorgan sued for fraud over mortgage securities

New York Attorney General Eric Schneiderman accuses Bear Stearns of misleading investors about the quality of the defective loans

New York State Attorney General Eric Schneiderman filed a lawsuit Monday against J.P. Morgan Chase & Co., accusing the country’s largest bank of defrauding investors with defective mortgage-backed securities.

The complaint accuses Bear Stearns & Co., which JPMorgan Chase acquired in 2008, of pooling and selling mortgage loans without fully investigating their quality. According to the civil suit, JPMorgan “systematically failed to fully evaluate the loans, largely ignored the defects that their limited review did uncover, and kept investors in the dark about both the inadequacy of their review procedures and the defects in the underlying loans.”

Alanna Byrne

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