JPMorgan sued over Bear Stearns mortgage securities fraud

The New York attorney general has accused US banking giant JPMorgan Chase & Co over widespread mortgage securities fraud committed by Bear Stearns, the investment banking company which JPMorgan acquired at the onset of the global financial crisis.

The lawsuit filed yesterday in New York state court by Eric Schneiderman seeks an undisclosed amount of damages related to billions of dollars in losses suffered by investors in sub-prime mortgage securities issued by Bear Sterns in 2006 and 2007.

The New York-based investment bank was rescued from a near-collapse through a take over by JP Morgan in 2008.

The lawsuit alleges Bear Stearns of defrauding investors by packaging up and selling poor quality mortgage assets that it knew were likely to default.

Investors have so far suffered losses amounting about $22.5 billion on more than 100 subcprime securities that the company issued.

The lawsuit seeks damages and payment of compensation to investors for ''fraudulent and deceptive acts'' by the company.