J.P. Morgan sued over Bear Stearns mortgage losses

The New York Attorney General has sued J.P. Morgan Chase for allegedly defrauding investors who lost billions of dollars on mortgage-backed securities sold by Bear Stearns.

In the first legal action to come from a long-running working group set up by US President Barack Obama to investigate the 2008 financial crisis, the Attorney General is pursuing J.P. Morgan for damages on behalf of investors who lost more than $20bn. While it did not sell the securities itself, J.P. Morgan is on the hook having bought investment bank Bear Stearns in March 2008. According to reports, J.P. Morgan said it will contest the allegations. Mortgage-backed securities were at the heart of the financial crisis which has rocked the globe. Based on a pool of underlying mort...