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NY fraud case over mortgage-backed securities comes too late for criminal charges

While New York Attorney General Eric Schneiderman (SHNEYE'-dur-muhn) alleges massive fraud in mortgage-backed securities in a lawsuit filed this week, he's not criminally prosecuting anyone.

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.

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