Allstate Sues JPMorgan for Fraud in Selling Mortgage backed Securities…A Lightning Rod Case?

Allstate Corp., a publicly traded U.S. home and auto insurer, has sued JPMorgan Chase for fraudulently selling it residential mortgage backed securities. The case, which may set off a spate of similar suits across the country, says that Allstate bought more than $700 million of the securities from JPMorgan and others believing it was buying highly rated, safe securities. The Complaint says “The Defendants knew the pool was a toxic mix of loans given to borrowers that could not afford the properties and thus were highly likely to default.” The beneficiaries of these allegedly fraudulent act were not only the banks but individuals within those banks who profited individually, significantly. If the allegations are true, why were these individuals not named for their fraudulent acts and for a disgorgement of ill-gotten gains? To far and too dangerous? The case is Allstate Bank v. JPMorgan Chase Bank 650398/2011 New York State Supreme Court (Manhattan).