NEW YORK, NY--(Marketwire - Oct 3, 2012) - A day after New York Attorney General Eric Scheiderman sued the now JPMorgan-owned Bear Stearns for fraud involving the creation and sale of mortgage-backed securities, the government has warned there will be more lawsuits to come. "There are more cases to come," Schneiderman said in a news conference. "We're investigating the misconduct of folks... that brought about the crash of 2008." The Paragon Report examines investing opportunities in the Banking Industry and provides equity research on JPMorgan Chase & Co. (
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This was the first lawsuit filed by President Obama's Residential Mortgage Backed Securities working group. The group, which was created in January, includes the Justice Department, the Securities and Exchange Commission, the New York Attorney General's Office, and the Federal Housing Association Inspector General.
The lawsuit says that Bear Sterns "systematically failed to fully evaluate the loans, largely ignored the defects... and kept investors in the dark about both the inadequacy of their review procedures and the defects in the underlying loans."
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"We're disappointed that the NYAG 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," JPMorgan spokesman Joe Evangelisti said in an email. "We intend to contest these allegations."
Bank of America last week has agreed to pay $2.43 billion to settle claims it had misled investor in the acquisition of Merrill Lynch. Bank of America has continued to deny the allegations. "Resolving this litigation removes uncertainty and risk and is in the best interests of our shareholders," Brian T. Moynihan, the bank's chief executive, said in a statement.
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