JPMorgan Accused Of Fraud by Allstate

JPMorgan Chase is being sued by Allstate insurance company for fraud, in the latest example of a big bank being accused of knowingly selling a poor-quality product.

In a lawsuit dated Wednesday, the insurance company accuses the bank of knowing that the bundles of loans it was selling were very likely to go bad. The suit joins a host of similar accusations from insurance companies and investors, who suffered losses when securities that were sold as high-quality instead turned sour.

An industry of originating, selling and investing in risky mortgages helped bring about the worst economic downturn since the Depression. When the real estate market crashed, investors, insurers and homeowners saw the value of their assets tumble.

Allstate is claiming that JPMorgan and the banks it now owns fraudulently sold it more than $750 million of such mortgage-backed securities, CNBC reports.

In another lawsuit, recently unsealed, Ambac insurance company has accused Bear Stearns (now owned by JPMorgan) not only of knowing the loans it was selling were toxic, but also of accepting payments from mortgage companies to compensate for those loans.

From the Allstate lawsuit:

Whereas Allstate was made to believe it was buying highly-rated, safe securities backed by pools of loans with specifically-represented risk profiles, in fact, Defendants knew the pool was a toxic mix of loans given to borrowers that could not afford the properties, and thus were highly likely to default.

READ the suit below:

document

Comments

[Siebenstein]

07:37 PM on 02/19/2011

I am getting annoyed by HP's journalism.

The headline that would be worth posting should read JPM Chase indicted for fraud, okay? !

[Siebenstein]

04:59 AM on 02/18/2011

Where is Wikileaks on this ??

[Siebenstein]

04:58 AM on 02/18/2011

Accused by Allstate and by ME !!

[dukeitout]

04:27 AM on 02/18/2011

Why are they being sued? Why aren't they being charged with a crime? You know---jail time for the quilty parties. Gross misrepresentation. They sold junk and said it was of the highest quality. This has to be a crime. If not I'm going to buy zircons and sell them as diamonds.

[Parsifals]

05:08 PM on 02/17/2011

Perhaps Allstate can do what the individual(s) can't do--bring the banks totheirknees.

[stargazer13]

01:07 PM on 02/17/2011

look at there gold and silver papers !!

that will floor ya ! one ounce sold to How many people again ?

[stargazer13]

12:58 PM on 02/17/2011

now who was it again ??

that bought 20 million dollars worth of U.S. nickels!!

because did you all know nickels

are now worth seven cents !! or the metal they are made with is worth more

now what are they going to do with all those nickels ?

because melting down our money is a crime I think ??

[fairplaystacy]

06:22 AM on 02/17/2011

Too big to nail!

[Olderandwiser55]

12:38 AM on 02/17/2011

It takes time but this is really interesting....9 comments here so far. Another explanation of why these things take so long:

http://4closurefraud.org/2011/02/16/allstate-vs-jpmorgan-chase-wamu-et-al-jpmorganwamu-lied-about-virtually-everything-when-selling-mortgages/

When the big guys sue the big guys, it makes me happy

[ta8ersalid]

11:25 PM on 02/16/2011

Seize all assets from JPmorgan and start sending the checks out to companies and homeowners that got Skewered.

[LiteSleeper]

07:43 PM on 02/16/2011

This is just awesome. The banks are going to have to fork over trillions for free. They'll fight tooth and nail and still lose. Bye bye bonuses.

[cats530]

03:11 PM on 02/17/2011

Maybe they will just ask for and RECEIVE another bailout. Record bonuses again for 2011 for a job well done!

[LiteSleeper]

03:18 PM on 02/17/2011

I don't think so. Even though I know the banks are stupid enough to demand one from their purchased Congressmen and Senators, the people are so angry about this that I think another bailout would push them over the edge and into the streets. We will take down the Bastille and every other crooked piece of this establishment.

[PilgrimMom]

05:21 PM on 02/16/2011

This excellent article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and is online:

Why Isn't Wall Street in Jail?
By Matt Taibbi

http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?page=1

What will it take to get the House and Senate to pursue meaningful actions to hold the banksters accountable? Why aren’t they being arrested, tried, convicted, fined and sentenced to real time in prison?

Instead, the Christian Conservative contingent concentrates on abortion and attempting to turn the U.S. into a Theocracy. Instead, the GOPers are determined to keep the Bush tax cuts to the wealthy forever, repeal a much-needed Healthcare bill, reduce funding for Social Programs for the neediest Americans and continue to bow to the demands of Corporations, Banks and Financial Services, Special Interest groups and wealthy individuals that buy and pay for them.

[how now]

04:39 PM on 02/16/2011

Deutsche Bank vs JPMorgan Chase, FDIC and WAMU

[cassie reinara]

04:32 PM on 02/16/2011

Oops came up with another one. Hope it doesn't any copyright stuff. CSI: WALL STREET. Obama can do a cameo appearance on the very first episode.

[cassie reinara]

04:29 PM on 02/16/2011

Let's stop with the accusations and all this semantic word play! Prosecutions, perp walks, I'd pay for a pay per view event for a reality show called "Wall Street Insiders: SING SING EDITION" Come on, let's hop to it. We need to find weekly featured guests now!