NEW YORK V JPMORGAN INDEX NO. 451556-2012

National Debt

national debt

Regulators

Mortgage Related

Government Sponsored

Announcement Date: October 9, 2016

jpmorgan

 

The suit accuses Bear Stearns of failing to ensure the quality of loans underlying residential mortgage-backed securities it packaged and sold in 2006 and 2007. Investors lost more than $22.5 billion on more than 100 of those securities, or one-quarter of their original value, the lawsuit said.

The lawsuit said there were “serious long-standing concerns” about the quality of reviews done by Bear Stearns, and that defects uncovered among the loans sold to investors were largely ignored.

The due diligence process was compromised “in order to increase their volume of securities”, the complaint says.

It also alleged a “systematic abandonment of underwriting guidelines”.

JPMorgan noted in its statement that the allegations concern actions by Bear Stearns before the investment bank was acquired by JPMorgan.

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