Nevertheless, some lawyers who are battling the large banks and investment firms on behalf of mortgage investors said they welcomed the action by the task force. The European bank had bought $1.6 billion in mortgage securities issued by Bear Stearns and Washington Mutual, another institution taken over by JPMorgan during the credit crisis. Rakoff, a federal judge in Manhattan, rejected the bank’s request to dismiss a complaint brought by Dexia, a Belgian-French bank. Late last week, for example, JPMorgan lost a round in one of these battles when Jed S. He added that the allegations predate JPMorgan’s acquisition. decided to pursue its civil action without ever offering us an opportunity to rebut the claims and without developing a full record - instead relying on recycled claims already made by private plaintiffs,” said Joseph Evangelisti, the bank’s spokesman. “We’re disappointed that the New York A.G. A representative for JPMorgan, which acquired Bear Stearns in a fire sale in March 2008, said it would contest the allegations. Schneiderman declined to comment on the filing. Rather, the suit contends that the improper practices were institutionwide and affected numerous deals during the period.Ī spokesman for Mr. Unlike many of the other mortgage crisis cases brought by regulators such as the Securities and Exchange Commission, the task force’s action does not focus on a particular deal that harmed investors or an individual who was central to a specific transaction. But Bear Stearns demanded cash payments from the lenders and kept the money, rather than passing it on to investors, the suit contends. Moreover, when Bear Stearns identified problematic loans that it had agreed to purchase from a lender, it was required to make the originator buy them back.
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