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New York attorney general Eric Schneiderman defends his action to file a lawsuit against J.P. Morgan
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Hardly breaking news right now New York attorney general Eric snyderman filing a civil lawsuit against JPMorgan Chase alleging fraud at its Bear Stearns unit in the -- mortgage backed securities.
JPMorgan Chase says -- all this happened before the government had them acquire it.
So why lawsuit now let's -- attorney general snyderman.
Who joins us now and I gotta tell you everyone is asking that question we Harvey Pitt on earlier.
Why is this happening now.
-- -- Prosecutors bring cases.
When the cases are ready I've gotten office about a year and a half ago we started our investigations last spring.
1 subpoenaed records from JPMorgan last June.
The president formed the residential mortgage mortgage backed securities working group at the -- early part of this year.
And we are working on multiple investigations.
This is not.
The working group -- in my office certainly is not singling out this one firm.
There will be other cases against other firms it just turns out that a lot of the conduct by bear.
Executives.
Was particularly flagrant they engaged in a pattern of misrepresentations.
Over a period of years.
They clearly identified their relationships with the loan originators with people like countrywide and American Home Mortgage.
And green point as what they called client number one and favored them at the expense of their investors.
He's and it's kind of troubling -- you mentioned the president and you know this is part of the mortgage working group.
You know put together by the president we -- five weeks out from the election a lot of people are asking the question is this politically motivated.
Now prosecutors bring cases look I I wish we would've been ready earlier I've been on record encouraging.
Everyone to go faster on these investigations this is the first case there will be more and it will keep going.
Long after the election season is over.
You -- -- let's talk about how you got ready for that because you did hire Carla Sanchez who came over from Paterson -- -- Webb and Tyler which is one of the firm's.
That privately sued JPMorgan Chase on the same -- JPMorgan is saying and one of their statements that we can put up for the viewers.
That a lot of this relied on you know basically re cycled information from her that she brought with her when you think about that.
Well no actually Carla Sanchez is -- terrific lawyer she.
Has recused herself from the litigation against bear -- in excess of caution I'm not sure was actually required.
But there was some point raised by.
The lawyers for JPMorgan and they know full well that they raise the point -- that she's not on this case but we have a spread sheet that we develop with our federal colleagues of 20/20 five pages of different litigation that have been brought against -- We're not wasting the taxpayers' money by reinventing the wheel we are absolutely looking at documents -- were uncovered and depositions taken.
In dozens and dozens of lawsuits -- site in our complaint to an FHFA case brought again.
On behalf of -- that FHFA and that FHFA inspector general is a part of our task force.
-- staff is working closely with us so of course we're building out what went before -- we have reviewed thousands of documents independently we've checked every source we've interviewed.
Dozens of witnesses all across the country again with the cooperation of our working group partners.
And the facts of the complaint really speak for themselves my office is the only.
-- -- can bring the Martin act complaint this is not about one deal or two deals or ten deals as many the other cases or this is about the and.
Tire pattern of condi let me she'd respond directly -- that they're still has led and I want to misquote -- hang on -- second.
Face it we're disappointed that the New York attorney general decided to pursue its civil action.
Without ever offering us an opportunity to rebut the claims and -- -- developing a full record instead relying on recycle claims.
-- made by private plaintiffs how do you respond to that did you not give them an opportunity.
To respond and now Melissa this is serve.
A blatantly false statement we first subpoenaed them -- -- -- said in June of last year.
We've had numerous interactions with their attorneys they've been in our offices they've made their arguments.
It is this is listen I'm sorry that.
They feel that they have to resort to things that are demonstrably false.
The complaint speaks for itself.
What they called a robust and intense due diligence process.
We're all sham they didn't have -- affected due diligence process we have internal documents reflecting that we have substantial evidence from -- Argument for why don't you do -- is -- -- is in their second statement where they say they acquired over the course of the weekend this company at the behest of the US government.
I mean I think they feel like.
They were forced to buy this company at a time when the country's financial system was falling apart.
And that in essence no good deed goes unpunished -- you are coming after them penalizing them suing them.
Or something they did it to try and help the financial system that's there argument how do you respond to that.
I have -- high regard for a lot of the folks over there but with all due respect they bought this company with a 29 billion dollar taxpayer loan.
If anything I think the people in most of America.
-- that there were too few strings put on the banks that were bailed out.
By TARP and through the -- and through other other benefits -- were provided by the federal government to the banks -- know they acquired the assets and the liabilities.
We would send a terrible message.
If we said oh you know what.
Some people are gonna get busted for material misrepresentations and fraud and some folks are just gonna get -- -- we can't do that were prosecutors.
This is not the only institution were pursuing I assure you there will be other cases and I look forward to it coming back on -- talking to you about them -- that's -- And we look forward to that's -- -- -- -- JPMorgan would certainly argue with the idea that they were bailed out and and are wondering why they went first but.
You know we'll we'll discuss this more another time New York attorney general Eric -- thank you for coming and we appreciate it.
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