Looking for a great deal?
Get ALL THREE of our new thank-you gifts when you donate $120.
This is a limited time offer – so act soon!
Remember toxic assets? The lousy mortgages — bundled into even lousier bonds — that big banks sold off until the whole thing went bust. We now have the first major case filed against a bank that went down with the mortgage-backed securities business.
“We’re prosecutors; we bring cases when they’re ready,” says New York Attorney General Eric Schneiderman. “And you will see more cases in the weeks and months ahead.”
A joint working group President Obama set up earlier this year has filed suit against JP Morgan Chase, which now owns Bear Stearns, the bank that went bust. Schneiderman, in addition to being the attorney general of New York, is co-chairman of that state-federal task force.
His suit accuses Bear Stearns of deceptive and fraudulent practices and seeks damages for investors after the company (allegedly) sold bonds that were backed by mortgages it knew weren’t going to pay off.
“All we’re doing is sending the message that there’s one set of rules for everyone,” says Schneiderman. “If we said this flamboyant fraud, this gross misconduct in misleading investers by a firm that was really at the top of this market — if we let them go just because of the chain of title, that would send a terrible message.”
Schneiderman says “folks are looking for accountability” — and if that comes from whoever happens to purchase a company like Bear Stearns, so be it.
While he admits that lawsuits like his will not get the economy back on track, he says that’s not exactly the point.
“The next time around you cannot get away with things just because you’re big or influential or powerful,” says Schneiderman.
The suit is being prosecuted as a civil suit, not a criminal one. And while the attorney general wouldn’t comment on whether it should be tried in criminal court, he did note that it would be “sooner rather than later” before Americans saw “additional actions.”
Such as, perhaps, an actual arrest.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.