(Reuters) – Democratic Congressman Barney Frank defended the nation's largest bank on Monday, saying in a statement that the government was wrong to go after JPMorgan Chase & Co for the alleged misdeeds of Bear Stearns.
Frank, the co-author of the 2010 Dodd-Frank financial reform law, said federal and state officials should reconsider holding financial firms liable for the wrongdoing of institutions they absorbed at the government's urging.
The unusual statement comes after New York Attorney General Eric Schneiderman sued JPMorgan, the nation's largest bank by assets on October 1 over mortgage-backed securities packaged and sold by Bear Stearns.
A JPMorgan spokeswoman declined to comment.
Since that suit was filed JPMorgan Chief Executive Jamie Dimon lashed out at the decision.
At a Washington event on October 10, Dimon said his bank and its shareholders were still paying the price for doing the Federal Reserve "a favor" by buying Bear Stearns in early 2008, when its instability was threatening the larger financial system.
Dimon said the suit could make financial firms think twice in the future about rescuing their failing rivals.
Frank, who served as chairman of the House Financial Services Committee during the Bear acquisition, said in his statement: "The decision now to prosecute J.P. Morgan Chase because of activities undertaken by Bear Stearns before the takeover unfortunately fits the description of allowing no good deed to go unpunished."
Frank backed up Dimon's assertion that it was the government that pushed Bear Stearns on JPMorgan.
Federal officials "believed that the failure of Bear Stearns would have terribly negative consequences for the economy," Frank said.
The officials urged JPMorgan "to do a good deed by taking over an institution which, I believe, the bank would never have sought to acquire absent that urging," he said.
A spokesman for the New York Attorney General's office did not immediately respond to a request for comment.
Frank also drew a line between what he said were fair legal actions and unfair ones, while noting he was not advocating for immunity for banks.
For example, he said Bank of America should probably be shielded from government legal action related to Merrill Lynch, which Bank of America took over in part because of federal officials' urging.
However, Frank said he was aware of no federal urging that led former Bank of America CEO Ken Lewis to take over Countrywide.
Home Owners Across the Nation Sue All Bank Servicers and Their Offshore Havens; Spire Law Officially Announces Filing of Landmark Lawsuit
Largest International Money Laundering Network in History Formed During Obama Administration; U.S. Banks' Theft of Home Owners' Money Laundered Through Cayman Islands, Isle of Man and Numerous Offshore-Based Affiliates
NEW YORK, NY, Apr 23, 2012 (MARKETWIRE via COMTEX) — In a lawsuit alleged to involve the largest money laundering network in United States history, Spire Law Group, LLP — on behalf of home owners across the Country — has filed a mass tort action in the Supreme Court of New York, County of Kings. Home owners across the country have sued every major bank servicer and their subsidiaries — formed in countries known as havens for money laundering such as the Cayman Islands, the Isle of Man, Luxembourg and Malaysia — alleging that while the Obama Administration was publicly encouraging loan modifications for home owners, it was privately ratifying the formation of these shell companies in violation of the United States Patriot Act, and State and Federal law. The case further alleges that through these obscure foreign companies, Bank of America, J.P. Morgan, Wells Fargo Bank, Citibank, Citigroup, One West Bank, and numerous other federally chartered banks stole hundreds of millions of dollars of home owners' money during the last decade and then laundered it through offshore companies. The complaint, Index No. 500827, was filed by Spire Law Group, LLP, and several of the Firm's affiliates and partners across the United States.
Contact: James N. Fiedler, Esq. Managing Partner Spire Law Group, LLP 877-475-2448 Email Contact
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