“WASHINGTON (MarketWatch) — New York Attorney General Eric Schneiderman late Monday filed a lawsuit against J.P. Morgan Chase & Co. in civil court, alleging widespread fraud in the sale of mortgage-backed securities.
The suit relates to mortgage-backed securities issued by Bear Stearns & Co., which was acquired by J.P. Morgan (US:JPM) in 2008 amidst the global financial crisis. The complaint argues that Bear Stearns defrauded “thousands of investors.
“Dennis Kelleher, president of advocacy group Better Markets, said in a statement that he hopes the lawsuit is the first of many and that lawbreakers on Wall Street will be punished.
“Finally! A major Wall Street bank has been sued for fraud for its reckless lending that helped cause the 2008 financial collapse,” Kelleher said. “Wall Street is a high crime area, but no one has been held accountable. The creation, sale and distribution of worthless toxic mortgages was at the core of the financial crisis.””
Read Ronald Orol’s full article here.