Posted by: youngragingbull | October 2, 2012

Word on the Street: JPMorgan sued over mortgage securities fraud

The state of New York is suing America’s largest bank over allegations that a unit the bank took over in 2008 defrauded mortgage-bond investors by tens of billions of dollars.

New York Attorney General Eric Schneiderman served legal papers on JPMorgan Chase & Co. on Tuesday in which the latter is accused of misleading investors about the quality of the mortgage debt that formed the basis for tens of billions of dollars worth of investments.

The regulator took aim at the mortgage-backed securities business of former Wall St. titan Bear Stearns, which was bought by JPMorgan in 2008.

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