New York Attorney General Eric Schneiderman said that the lawsuit over mortgage-backed securities against JPMorgan Chase & Co. will serve as a template for suits against other issuers, Bloomberg News reported yesterday. Schneiderman alleged that the Bear Stearns business that JPMorgan bank took over in 2008 deceived mortgage-bond investors about the defective loans backing securities they bought, leading to “monumental losses,” according to a complaint filed yesterday in New York State Supreme Court. The Bear Stearns mortgage unit packaged $212 billion in mortgage bonds from 2003 through 2006, according to the complaint. Losses on $87 billion of those bonds packaged during just two of those years total $22.5 billion so far, it estimated. Schneiderman said that he wants the bank to disgorge all money it obtained in connection with or as a result of the alleged fraud.
