J.P. Morgan Hit with Mortgage Fraud Suit

J.P. Morgan Chase & Co. (NYSE: JPM) must regret the purchase of Bear Stearns, no matter how favorable the terms may have been.

The State of New York filed suit against the huge bank of fraud in its promotion of mortgaged backed securities ahead of the financial crisis

MarketWatch reports:

The suit relates to mortgage-backed securities issued by Bear Stearns, which was acquired by J.P. Morgan in 2008 when the firm collapsed. The attorney general's office intends to follow up with similar actions against other sponsors and underwriters of mortgage-backed securities.

So, it can fairly be forecast that most other large U.S. bank with units which traded and sold mortgage backed paper will have suits filed against them as well.

Douglas A. McIntyre

Filed under: 24/7 Wall St. Wire, Banking, Law Tagged: JPM