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 JPM +1.21% in 2008 when the firm collapsed amidst the financial crisis.
The complaint argues that Bear Stearns defrauded “thousands of investors.”
The charges, which came partly as a result of a federal mortgage task force formed in January by the Justice Department, assert that the misconduct was in connection with the firm’s “due diligence and quality control processes” that “constituted a systemic fraud on thousands of investors.”
