Tuesday, 2 October 2012

JP Morgan Sued Over Bear Sterns Securities Fraud

JP Morgan is being sued yet again - this time for the MBS fraud committed by Bear Stearns, the imploded bank that JPM acquired in 2008 for $2.8 billion.

While somewhat encouraging as it keeps the Morgue in the headlines in a negative light, it simultaneously exasperates me, as all that will happen is a fine from regulators and a potential settlement for investors. There will be no criminal charges filed.

More slaps on the wrist for the top Wall St. offenders.

1) Working Group on MBS Fraud Brings First Complaint Against a Big Bank, JPMorgan
2) New York attorney general sues JPMorgan over Bear Stearns securities
3) Memo to Jamie Dimon: You Still Think Bear Stearns is Not Material??

In regards to the last link, I have one thought to add. But first, a quote:

"So what happens with JPM and Bear?  One word: rescission.  My guess is that the fraud perpetrated by Bear Stearns in creating these rancid securities will eventually force JPM to repurchase some of the bonds from investors.  That is tens or even hundreds of billions of dollars of face amount of bad securities."
My guess is that JPM is not very concerned about potentially buying back toxic securities from investors in the [likely] case that they lose the lawsuit. Why?

Simple: QE3-finity. With the Fed buying $40 billion per month in MBS from major banks in exchange for cold hard cash - which will rot forever more in the coffers of the likes of the Morgue - why would JPMorgan and Mr. Dimon worry in the slightest about the (lack of) consequences in acquiring Bear Stearns without first having them go through bankruptcy?

Not to mention that if they end up being fined by regulators and doling out cash to defrauded BS investors, it's not like the bank will take a hit anyway. They'll do what they've always done - steal more from the taxpayers to pay off their fines, and continue on their merry fraud-committing way.

This is a sham, and probably just fodder for the upcoming US elections in November. Make it look like you're doing something about something, while distracting from the real fraud being perpetrated by the other major banks - and indeed, the far more heinous fraud being committed by JPM on so many different other levels.

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