[Lamplighter]

Yes, the beat goes on...


Wall Street Journal
JEAN EAGLESHAM And DAN FITZPATRICK
10/01/12

J.P. Morgan Sued on Mortgage Bonds

New York's top prosecutor filed a civil complaint against J.P. Morgan Chase Co.,
alleging widespread fraud by the company's Bear Stearns unit in the sale
of mortgage-backed securities in the run-up to the financial crisis.

Eric Schneiderman, New York's attorney general, filed the civil lawsuit
in New York state court Monday. The case is the first brought under the aegis of
a law enforcement group that was formed by President Barack Obama in January
to pursue alleged wrongdoing related to the financial crisis.

More cases from the group are expected to follow.
"We intend to follow up with similar actions against other sponsors and underwriters of RMBS,"
said an official in the attorney general's office.

The allegations relate to billions of dollars of subprime securities
issued by Bear Stearns Cos. before the troubled firm, now owned by J.P.Morgan, collapsed in 2008.
The suit alleges that losses on residential-mortgage securities issued by Bear Stearns
in 2006 and 2007 alone were "astounding," totaling $22.5 billion, or more than a quarter
of the original principal balance. The action asks that the company be made to pay
an undisclosed amount of damages "caused, directly or indirectly, by the fraudulent and deceptive acts."

New York's attorney general filed a civil complaint against J.P. Morgan Chase alleging
widespread fraud in the sale of mortgage-backed securities in the run-up to the financial crisis.
<snip>