Schneiderman: More banks will be sued

October 02, 2012 04:00PM

More Wall Street banks could soon be served with lawsuits, New York Attorney General Eric Schneiderman said Tuesday. His warning came on the heels of his office’s lawsuit against Bear Stearns, now a unit of JPMorgan Chase, for alleged misrepresentation of the quality and risks associated with the mortgage-backed securities that the company sold to investors.

“There are more cases to come,” said Schneiderman at a press conference, reported on by CNN. “We’re investigating the misconduct of folks… that brought about the crash of 2008.”

The suit against JPMorgan seeks unspecified damages and alleges that mortgage-based products that Bear Stearns offered up in 2006 and 2007 caused investors to lose some $22.5 billion.

It marks the first such lawsuit to come out of the A.G.’s task force on mortgage-backed security fraud. But time is running short for the group, as these upcoming lawsuits must be filed within five years of when the fraud was allegedly committed. So from January 1, 2013 on, 2007 sales can’t be touched. [CNN]