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Too late for NY prosecution in securities meltdown

While New York Attorney General Eric Schneiderman alleges massive fraud in mortgage-backed securities in a lawsuit filed this week, he's not criminally prosecuting anyone. WAMC's Dave Lucas has more...

Described as a template for more lawsuits to follow, it signals that Wall Street players won't face state prison for packaging and selling the troubled investments that nearly brought the U.S. economy to its knees.

The felony statute of limitations under New York's Martin Act against securities fraud is five years, so it's too late to bring a criminal case.

The civil suit claims misconduct by Bear Stearns & Co. in 2006-2007 cost investors $22.5 billion in losses and left them holding an additional $30 billion in bad loans.

The suit filed Monday names Bear Stearns successor JP Morgan Chase, which says it will contest the allegations.

(c) 2012 Associated Press

Dave Lucas is WAMC’s Capital Region Bureau Chief. Born and raised in Albany, he’s been involved in nearly every aspect of local radio since 1981. Before joining WAMC, Dave was a reporter and anchor at WGY in Schenectady. Prior to that he hosted talk shows on WYJB and WROW, including the 1999 series of overnight radio broadcasts tracking the JonBenet Ramsey murder case with a cast of callers and characters from all over the world via the internet. In 2012, Dave received a Communicator Award of Distinction for his WAMC news story "Fail: The NYS Flood Panel," which explores whether the damage from Hurricane Irene and Tropical Storm Lee could have been prevented or at least curbed. Dave began his radio career as a “morning personality” at WABY in Albany.