SEC subpoenas JPMorgan, Credit Suisse over mortgage practices

New York /
May.May 06, 2011 10:01 AM

JPMorgan Chase has been subpoenaed by the U.S. Securities and Exchange Commission over mortgages issued before the real estate collapse that have since soured, Bloomberg News reported. The move comes amid an SEC probe into the mortgage practices of several U.S. banks, including Credit Suisse, which was subpoenaed last week. The JPMorgan subpoena is seeking information related to Bear Stearns mortgage practices, after bond insurers alleged that the bank, which JPMorgan acquired in 2008, had demanded refunds from originators but then failed to share those refunds with sellers. Meanwhile, the Credit Suisse investigation was disclosed yesterday by the bond insurance unit of MBIA, in a filing in New York State Supreme Court. MBIA said it is seeking the same documents the SEC is asking for in an attempt to prove that Credit Suisse deliberately packaged bad loans into bonds, and then failed to repurchase them out of a 2007 securitization as it was obligated to do under its contract. [Bloomberg]


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