Bloomberg reports that Schneiderman said in a complaint filed Monday in New York State Supreme Court that investors were deceived about the defective loans backing securities they bought, leading to 'monumental losses'.
'Defendants systematically failed to fully evaluate the loans, largely ignored the defects that their limited review did uncover, and kept investors in the dark about both the inadequacy of their review procedures and the defects in the underlying loans', Schneiderman’s office said.
Schneiderman in January was named co-chairman of a state-federal group formed to investigate misconduct in bundling of mortgage loans into securities leading up to the financial crisis. The group includes officials from the U.S. Justice Department, the Securities and Exchange Commission, the FBI and other federal and state officials.
Joe Evangelisti, a JPMorgan spokesman, said the New York-based bank would contest the complaint, which is 'entirely about' conduct by Bear Stearns. JPMorgan acquired Bear Stearns in 2008.
Hit the link below to access the complete Bloomberg article:
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