The complaint is the first to be filed by the joint federal and state task force formed in early 2012 to hold Wall Street banks accountable for their role in the financial crisis. The civil suit against Bear Stearns (acquired by JPMorgan in 2008) alleges that the bank "kept investors in the dark" about the quality of mortgage-backed bonds it was securitizing and selling between 2005 and 2007.

The New York Times reports:

The firms made material misrepresentations about the quality of the loans in the securities, the lawsuit said, and ignored evidence of broad defects among the loans that they pooled and sold to investors.

Moreover, when Bear Stearns identified problematic loans that it had agreed to purchase from a lender, it was required to make the originator buy them back. But Bear Stearns demanded cash payments from the lenders and kept the money, rather than passing it on to investors, the suit contends.

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