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News Wrap: New York State Files Mortgage Fraud Lawsuit Against JPMorgan Chase

October 2, 2012 at 12:00 AM EDT
In other news Tuesday, New York Attorney General Eric Schneiderman filed a major mortgage lawsuit against JPMorgan Chase, claiming that former rival Bear Stearns -- which JPMorgan bought in 2008 -- misled the investors who bought and lost sub-prime mortgage loan securities in 2006 and 2007 after the company collapsed.
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KWAME HOLMAN: J.P. Morgan Chase now faces a major mortgage fraud lawsuit involving the actions of Bear Stearns, the former rival it bought in 2008. New York state filed a civil case Monday. It alleges Bear Stearns misled investors who bought securities based on subprime mortgage loans in 2006 and 2007. Their collapse led to huge losses.

New York State Attorney General Eric Schneiderman said today on CNBC the company’s actions were flagrant.

ERIC SCHNEIDERMAN, New York State attorney general: You can’t as a prosecutor allow this conduct to go unpunished and send a message that there’s one set of rules for one group of people and another set for others. So, we brought the case because it was ready. It’s the first case ready. We are by no means singling them out.

KWAME HOLMAN: The lawsuit is the first to arise out of a federal-state working group that targets alleged misconduct in the financial meltdown of 2008.

Home prices in the U.S. had a big month in August. A private data firm, CoreLogic, reported today that prices jumped more than 4.5 percent over a year earlier. That’s the biggest gain in more than six years. Still, it wasn’t enough to give Wall Street much of a boost. The Dow Jones industrial average lost more than 32 points to close at 13,482. The Nasdaq rose six points to close at 3,120.

U.S. auto sales surged more than 10 percent in September from a year ago. Toyota and Volkswagen led the way, with gains of 30 percent to 40 percent. Chrysler had a 12 percent increase, its best September since 2007. General Motors was up just 1.5 percent, and sales at Ford were flat.

There’s been a new outbreak of violence in northern Nigeria, where 27 college students were killed overnight. It happened in the town of Mubi. Some of the victims were shot to death, while others were stabbed. Police said the violence could have been related to warring student factions. The Islamist group Boko Haram also has carried out killings in the region.

The last stronghold of Islamist rebels in Somalia fell today to African Union forces. Kenyan troops and armored vehicles took up positions around the port of Kismayo. The city had been a power center for Al-Shabab, the group that’s fought Somalia’s internationally backed government for years. Al-Shabab is allied with al-Qaida, but the militants now have been driven out of all of Somalia’s major cities.

Those are some of the day’s major stories.