Bear Stearns suit a praiseworthy first step for Schneiderman task force
First steps are finally being taken to hold one of the Big Banks accountable for its role in causing the economic collapse.
A joint federal and state task force, led by New York Attorney General Eric Schneiderman, has filed suit against Bear Stearns – now owned by JPMorgan Chase – alleging systemic fraud, deceit and recklessness that ripped off investors and devastated homeowners across the nation.
According to the suit, Bear Stearns claimed to be selling carefully evaluated, high-quality investments – without actually bothering to evaluate or check the quality of the investments.
Worse, when Bear Stearns’ limited review process did uncover defects, the suit alleges, it hid the details from investors and failed to correct the problems.
By the time the crisis played out, Bear Stearns investors lost $26 billion. JPMorgan Chase acquired the troubled firm following its receipt of a taxpayer bailout.
Meanwhile, millions of families lost their homes – homes whose predatory mortgage terms were tied up in sour deals like those Bear Stearns is accused of perpetrating.
This is why Wall Street cannot be permitted to regulate itself.
Schneiderman’s task force deserves praise.
It’s an excellent, if long delayed, first step. But more must be done.
We set up a web page where you can thank Attorney General Schneiderman and the Residential Mortgage-Backed Securities Working Group for taking this long overdue action against one of the reckless Wall Street titans.
However, for the millions of Americans who, because of Wall Street’s recklessness, lost their savings, their homes, their jobs and their very way of life, this single civil suit against one Big Bank is not enough.
That’s why we’re also urging Schneiderman and other prosecutors to pursue further charges, including criminal charges, against the Big Banks.
Because no Big Bank CEO is too big to jail.
Flickr photo via Shiny Things.