On Tuesday, the New York Attorney General's Office filed a lawsuit against megabank JPMorgan Chase. The suit claims that the investment bank Bear Stearns, which JPMorgan acquired in 2008, committed fraud and made material misrepresentations in the marketing and sale of residential mortgage-backed securities in the run-up to the financial crisis. While the suit doesn't request a specific amount in damages, it nevertheless alleges that Bear Stearns' actions in 2006 and 2007 alone have already led to $22.5 billion in damages.
In the following video, Motley Fool contributor John Maxfield explains the lawsuit and puts it into perspective for current and prospective investors in the bank. While JPMorgan Chase will unquestionably survive these legal issues, it will have to spend hundreds of millions, if not billions, of dollars defending itself. To learn about the one bank with the least amount of risks like these, download our report about The Only Big Bank Built To Last. It's free, so click here to access it now.
