New York Attorney General Eric Schneiderman on Oct. 1 filed a civil lawsuit against Bear Stearns & Co., now a unit of JPMorgan Chase & Co., alleging Bear Stearns and its lending unit defrauded investors who purchased mortgage-backed securities packaged between 2005 and 2007.
The complaint by Schneiderman, who also serves as co-chairman of the federal Residential Mortgage-Backed Securities Working Group, states that Bear Stearns and its EMC Mortgage unit misrepresented the quality of the loans that were subsequently packaged into securities and marketed to investors.
The lawsuit was filed in the New York State Supreme Court.
Bear Stearns was acquired by JPMorgan in March 2008 following its collapse in the wake of the subprime mortgage crisis.
A JPMorgan spokesman is quoted by the New York Times as saying the bank would contest the allegations, and noting that the period in question precedes the bank’s acquisition of Bear Stearns.
