Say good bye to JP Morgan Chase & Bank of America as we have known them

Posted on September 30, 2011 by


Too Big To Fail My Ass!

I found this re-posted Reuters News article  from someone that posted on one of my other articles today.  They asserted the opinion that both Bank of America and JP Morgan Chase would soon fold.  I happen to agree with his view but I am unsure how these “Ozero alleged” “to big to fail” banks are going to be handled.

What I’d like to see is that they may go the way of Lehman Brothers and be allowed to tank and let the free markets consume the remains as it should be. But what worries me is that are we looking at another huge TARP.  More looting of the peoples earnings.  It is time for some accountability of these banks go under.  I mean real prison time.  And those at the SEC and Congress that allowed this to go this far by meddling where they had no business would make great cell mates.


By Jonathan Stempel

Fri Sep 30, 2011 4:34pm EDT

(Reuters) – JPMorgan Chase & Co and Bank of America Corp were hit with new lawsuits by investors claiming losses on $4.5 billion of soured mortgage debt, adding to litigation targeting the two largest U.S. banks.

The plaintiff Sealink Funding Ltd said it lost money after buying nearly $2.4 billion of residential mortgage-backed securities (RMBS) from JPMorgan and $1.6 billion from Bank of America from 2005 to 2007, relying on offering materials that were misleading about the quality of the underlying loans.

According to court papers, Sealink is an Irish entity that oversees risky RMBS that contributed to the near collapse of Germany’s Landesbank Sachsen AG.

Another plaintiff, Germany’s Landesbank Baden-Wurttemberg, raised similar claims in a separate lawsuit against JPMorgan over $500 million of RMBS that it said it bought.

The lawsuits accuse the banks of packaging large amounts of high-risk mortgages by such issuers as Countrywide Financial now owned by Bank of America, and Bear Stearns and Washington Mutual, now owned by JPMorgan, in pursuit of higher profit.

“This misconduct has resulted in astounding rates of default on the loans underlying the defendants’ RMBS and massive downgrades of the (investors’) certificates, the vast majority of which are now considered ‘junk,’” the lawsuits said.

The investors are seeking compensatory and punitive damages in the lawsuits, all filed Thursday in the New York State Supreme Court in Manhattan.

Bank of America spokesman Lawrence Grayson said the bank will defend against its lawsuit by Sealink, which “appears to be another sophisticated investor looking for someone to blame” for losses caused by a downturn in the economy.

JPMorgan spokeswoman Jennifer Zuccarelli declined to comment. Bernstein Litowitz Bernstein & Grossmann, which represents Sealink and Landesbank Baden-Wurttemberg, did not respond to a request for comment.

In a separate lawsuit filed on Thursday in the same court, Britain’s Barclays Plc was sued by Germany’s HSH Nordbank AG, which said it lost $40 million after being misled into buying risky RMBS.

Barclays spokeswoman Kristin Friel declined to comment.

Banks face many lawsuits by mortgage securities investors seeking to hold them responsible for losses on debt that once seemed safe but turned toxic once the housing and credit crises began more than four years ago.

Bank of America is seeking court approval of an $8.5 billion global settlement covering investors in mortgage pools with $174 billion of unpaid Countrywide principal balances.

That bank and JPMorgan are also among lenders negotiating with regulators including all 50 state attorneys general on a multibillion-dollar accord addressing foreclosure abuses.

The cases are all in the New York State Supreme Court, New York County. They are HSH Nordbank AG et al v. Barclays Bank Plc et al, No. 652678/2011; Sealink Funding Ltd v. Countrywide Financial Corp et al, No. 652679/2011; Landesbank Baden-Wurrtemberg et al v. Bear Stearns & Co et al, No. 652680/2011; and Sealink Funding Ltd v. Bear Stearns & Co et al, No. 652681/2011.

(Reporting by Jonathan Stempel in New York, editing by Gerald E. McCormick, Matthew Lewis,Gary Hill)

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Posted in: Crime Inc