Former U.S. Congressman Barney Frank, the co-author of the Dodd-Frank Reform and Consumer Protection Act (Dodd-Frank) and former chair of the House Financial Services Committee, has noted that the recent suit brought by the New York State Attorney General against JP Morgan Chase & Co. for widespread mortgage related misconduct at Bear Sterns & Company should not go forward. JP Morgan acquired Bear Sterns & Company following its collapse in 2008, which was, according to Frank, “at the strong request of the Federal Reserve and the Secretary of the Treasury during the Bush administration.”
Congressman Frank further noted that “federal officials involved believed that the failure of Bear Stearns would have terribly negative consequences for the economy, and they urged JP Morgan Chase to do a good deed by taking over an institution which, I believe, the bank would never have sought to acquire absent that urging. The decision now to prosecute JP Morgan Chase because of activities undertaken by Bear Stearns before the takeover unfortunately fits the description of allowing no good deed to go unpunished.”
In addition, Congressman Frank further added that buyers of distressed firms at the government’s request should not face prosecution. This would include Bank of America’s acquisition of Merrill Lynch, but not in connection with its purchase of mortgage giant Countrywide Financial. ("Barney Frank: JPMorgan Doesn't Deserve To Be Sued,” Forbes, October 22, 2012).