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New York takes Chase to Court for Stearns’ actions

New York is seeking fraud actions against JPMorgan Chase & Co., as reported by Reuters on October 1st, 2012. New York Attorney General, Eric Schneiderman, filed a civil suit against Chase early October for the mortgage-backed securities that were packaged and sold by Bear Stearns.

Chase bought Bear Stearns in early 2008. Chase stated that they will be contesting the allegations of fraud made by the Attorney General and mentioned that these actions were done prior to Chase’s involvement with the company. According to the court documents the NY Attorney General claims that the company sold loans in 2006 and 2007 that resulted in the purchasers losing a large amount of their investment. It was reported that “investors lost more than $22.5 billion on more than 100 of those securities, or one-quarter of their original value.”

The allegations reason that the lost was a result of Bear Sterns’ lack of quality review for defects prior to selling them or ignoring the defects found. The Attorney General goes on to reason that the companies’ failure to do their due diligence was so they could increase the number of securities sold.

This case is just one of a few that Chase is currently facing. At this time there is no reported trial date.

If you are in debt or are considering bankruptcy, it is advisable to consult with an attorney. Jayson Lutzky has been practicing law in New York for over 29 years and understands people’s rights and obligations. Call our office at (800) 660-5299 to set up a free consultation. Visit us online, www.BankruptcyNYC.com.

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