New York State Attorney General Eric Schneiderman filed a civil lawsuit against JPMorgan yesterday, charging the firm with widespread fraud committed by the mortgage securitization unit of Bear Stearns, which JPMorgan acquired in 2008. Not everyone was impressed.
JPMorgan spokesman Joe Evangelisti said the bank was “disappointed” that Mr. Schneiderman filed his lawsuit without giving the firm a chance to rebut claims, in a statement emailed to press outlets. The complaint contains no new revelations and is marred by a sloppy error, wrote Bloomberg columnist Jonathan Weill.
Perhaps the strongest reaction came from Rochdale Securities analyst Richard Bove, who said New York’s role as a financial capital is “an anachronism,” according to Net Net, in a note distributed today.
“I am constantly struck by the fact that Michigan does not sue the auto industry; Texas is not suing the oil industry; California is not suing the entertainment industry; and Florida is not suing the tourism industry,” Bove wrote. “They do not sue farmers in Iowa. New York never stops suing the financial industry. Why? What do these other states understand that New York does not?”
“The financial industry that is left remains committed to New York because it has sunk cost there and because of proximity among firms,” he said. “However, if financial companies are going to continually be sued for billions and even tens of billions of dollars, the legal costs of remaining in New York exceeds the sunk cost in buildings and equipment.”
If you can’t make it here …