Tag Archives: Bear Stearns


Bank of America Suit Against Two Ex-Bear Stearns Executives Is Dismissed

Bank of America Suit Against Two Ex-Bear Stearns Executives Is Dismissed

Ralph R. Cioffi and Matthew M. Tannin, two former Bear Stearns managers who were among the few executives to face a trial on criminal charges in the aftermath of the financial crisis, have won another legal victory.

Late on Tuesday, a federal judge dismissed a lawsuit brought against Mr. Cioffi and Mr. Tannin by Bank of America. The bank accused the two men of lying about the health of their hedge funds, which had invested heavily in subprime mortgage-backed securities that plummeted in value when the housing market collapsed.


JPMorgan Agrees to $18.3 Million Mortgage Lawsuit Accord

JPMorgan Agrees to $18.3 Million Mortgage Lawsuit Accord

JPMorgan Chase & Co. (JPM) agreed to pay $18.3 million to settle claims that its Bear Stearns Cos. unit failed to disclose the actual interest rates on adjustable-rate mortgage documents.

U.S. District Judge S. James Otero in Los Angeles will consider whether to approve the agreement at a Oct. 7 hearing, according to a court filing.

The lawsuit was filed in 2007 by plaintiffs who refinanced their home loans with adjustable-rate mortgages. JPMorgan acquired Bear Stearns in June 2008. The loans were acquired by a Bear Stearns unit, EMC Mortgage, based in Lewisville, Texas, that specialized in buying and servicing troubled mortgages.


JPMorgan Suit With Bear Stearns Liquidators Is Ended

JPMorgan Suit With Bear Stearns Liquidators Is Ended

A lawsuit against JPMorgan Chase & Co. (JPM) by liquidators of two Bear Stearns Cos. hedge funds seeking $1.5 billion over their collapse formally ended today after the parties reached a settlement in June, according to court records.

Bear Stearns Cos., two of its former managers, and auditor Deloitte & Touche were accused of misleading investors in two hedge funds with holdings in subprime mortgages that imploded and filed for bankruptcy in July 2007.


U.S. Steps Up JPMorgan Probe Over Bear Stearns Mortgages

U.S. Steps Up JPMorgan Probe Over Bear Stearns Mortgages

* JPMorgan faces multiple mortgage investigations

* Investigations another obstacle for CEO Dimon

* High legal costs could continue

* Bank seeks deal over London Whale debacle (Revises throughout, with comment from regulator and company’s legal costs)


Former Bear Stearns Executives Seemingly Unscathed By Financial Crisis They Helped Trigger

Former Bear Stearns Executives Seemingly Unscathed By Financial Crisis They Helped Trigger

Before Lehman crashed, there was “The Bear.”

Bear Stearns, once the nation’s fifth-largest investment bank, had been a fixture on Wall Street since 1923 and had survived the crash of 1929 without laying off any employees.

But in 2008, its customers and creditors didn’t much care about its storied history. They were worried that the billions of dollars of mortgage-backed securities on its books weren’t worth what the company claimed. En masse, they stopped doing business with Bear.

Within a few days, on Monday, March 17, Bear was gone — subsumed into JPMorgan Chase & Co. with the help of the Federal Reserve for a price that was approximately the value of its shiny new Madison Avenue office tower alone.

Bear Stearns failed largely because it had spent the previous five years gorging on subprime mortgages in what appeared to be an ever-rising housing market. When home prices started falling and those loans started to go bad, Bear’s creditors got scared and pulled their money out of the investment bank.

The demise of the 85-year-old firm was just a harbinger of what was to come. Six months later, Lehman Brothers collapsed under the weight of its own mortgage securities, sending first the financial system, and then the entire global economy, into a tailspin from which it hasn’t yet fully recovered.

Five years later, the executives that were in charge of Bear’s headlong dive into the cesspool of subprime mortgage lending hold similar jobs at the most powerful banks on Wall Street: JPMorgan, Goldman Sachs, Bank of America and Deutsche Bank.


NY attorney general says JPMorgan wrong in claiming case was filed too late

NY attorney general says JPMorgan wrong in claiming case was filed too late

Memo to JP Morgan: Read the Martin Act law.

NEW YORK (Reuters) – New York Attorney General Eric Schneiderman defended his $22.5 billion lawsuit against JPMorgan Chase & Co in the face of the bank’s claims that the mortgage-backed securities case was brought too late and and was too vague to go forward.

In a filing late Friday in New York state Supreme Court in Manhattan, Schneiderman said the nation’s largest bank was wrong when it argued the case was defective and should be dismissed because it was filed after a three-year statute of limitations.

Schneiderman said New York law gives the attorney general six years to file investor fraud claims under the Martin Act, a securities fraud statute. He also said the complaint included the necessary particulars to pursue the claims.

The complaint “more than adequately put defendants on notice of the fraudulent practices for which the Attorney General seeks relief,” Schneiderman wrote in opposing the motion to dismiss.


In the JPMorgan case, the attorney general argued that the bank was mistaken when it said the three-year statute applies because he didn’t accuse Bear Stearns of common law fraud, which includes an intent to deceive.

New York’s Martin Act is considered powerful in part because it does not require proof of intent.

But Schneiderman said that his complaint claims the bank “knew, or at a minimum recklessly disregarded,” that its due diligence and quality control were not as advertised.


Reuters is Writing Stories to Help JP Morgan Defend Itself from the NYAG Now

Reuters is Writing Stories to Help JP Morgan Defend Itself from the NYAG Now

J.P. Morgan’s outside counsel at Sullivan & Cromwell are showing signs of desperation in their mortgage securities fraud lawsuits. You know the ones that the bank says in SEC fillings are now $140 billion of litigation. Last week the banks lawyers got a Reutersreporter to write a hit piece on the New York Attorney General’s $22 billion civil fraudsuit against JPM/ Bear Stearns/ EMC.

The Reuters story, by Karen Freifeld, basically speculated a judge would be looking at a conflict of interest in the AG’s office because they hired a top lawyer from the firm, PBWT, who first discovered some of the alleged Bear Stearns rmbs fraud. Freifeld starts by writing a line that ‘legal experts’ think the former PBWT attorney who worked on the Ambac v. JP Morgan Securities suit has a conflict because she also played a role in the NY AG’s suit. Karla Sanchez, the lawyer in question, started with the NY AG in January 2011 – after the explosive amended Ambac complaint was filed. This is the complaint you just saw me talking about in the Frontline film The Untouchables.

It’s odd for Retuers to not quote actual working lawyers in the story and leave the reader guessing that the reporter actually found attorneys to back up her claim. I called five securities lawyers last week trying to get one of them to go on the record that they saw a conflict here but none would. That’s because Robert Sacks, JPM’s puffy chested outside counsel from Sullivan & Cromwell, doesn’t actually lay out in the motion he filed last week what he thinks the conflict is.

The Reuters reporter, who has indirectly become a JP Morgan’s flack, also doesn’t explain to the reader that JP Morgan’s lawyer, Sacks, didn’t actually file a motion in the NY AG’s case in New York civil supreme court. All he really did is indirectly mention the idea in a damn footnote in a motion for an entirely different case. On February 19th Sacks filed a motion trying to stop Judge Ramos from allowing AMBAC/PBWT to get loan file discovery and CLAS database records from third-party due diligence firm Clayton – info they been asking for over a year that Clayton is also fighting to not turn over because it’s likely really really damaging. [ You see on top of all this Clayton is apparently STILL covering up for it’s big bank clients even though they signed an agreement to help the State of New York prosecute their financial crisis cases in turn for them not getting sued for their role in billions of rmbs fraud. ] It’s this motion that has the footnote that Reuters in turn made into a story to discredit the NY AG’s head of economic cases.