New York Attorney General Eric Schneiderman filed a civil complaint against JPMorgan Chase for fraud in the selling of mortgage-backed securities. Schneiderman is the co-chairman of a presidential task force formed in January to investigate possible civil and criminal misconduct in the formation and sale of mortgage-backed securities. The allegation is over securities issued by the investment bank Bear Stearns in 2006 and 2007. JPMorgan acquired Bear Stearns in March 2008.
The federal mortgage task force that was formed in January by the Justice Department filed its first complaint against a big bank on Monday, citing a broad pattern of misconduct in the packaging and sale of mortgage securities during the housing boom.
The complaint contends that Bear Stearns and its lending unit EMC Mortgage defrauded investors who purchased mortgage securities packaged by the companies from 2005 through 2007. The firms made material misrepresentations about the quality of the loans in the securities, the lawsuit said, and ignored evidence of broad defects among the loans that they pooled and sold to investors.
Moreover, when Bear Stearns identified problematic loans that it had agreed to purchase from a lender, it was required to make the originator buy them back. But Bear Stearns demanded cash payments from the lenders and kept the money, rather than passing it on to investors, the suit contends.
Always, it's about the money. No criminal charges, again, because the feds wouldn't receive a cash settlement. Yet over 7,000 Occupy Wall Street protesters have been beaten, pepper-sprayed, arrested, and jailed...bankers? Zero. No justice here.
However, this was done in Schneiderman's capacity as the New York Attorney General, not the task force. A lack of confidence in the task force, perhaps?