Ghost Of Bear Stearns Haunts JPMorgan: N.Y. Hits Bank With Fraud Accusation
New York‘s chief prosecutor today filed a civil complaint againstJPMorgan Chase, laying out allegations of extensive fraud by Bear Stearns during the sale of residential mortgage-back securities leading up to the housing crisis, which resulted in the collapse of the bank and its purchase by JPMorgan.
Bear Stearns embarked on a deceptive course, leading investors to believe that these securities were carefully monitored, according to the complaint from New York Attorney General Eric Schneiderman.
The financial institution would routinely overlook defective loans that received red flags during reviews and “ignored deficiencies that they knew existed in the due diligence review process itself.”