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Jamie Dimon's Bank of America Moment: Street Whispers

Updated with comment from former SEC Senior Counsel Thomas Gorman.

NEW YORK ( TheStreet) -- This time it could be different.

New York State Attorney General Eric Schneiderman's lawsuit against JPMorgan Chase (JPM - Get Report) over mortgage-backed securities sold by Bear Stearns before that company was acquired by JPMoran in March 2008 alleges fraud that led to investor losses of $22.5 billion, although the complaint filed in New York State court on Monday doesn't specify specific damages being sought.

JPMorgan for years has reported about "multiple civil actions" against Bear Stearns, "certain former subsidiaries," and "certain individuals formerly employed by Bear Stearns" resulting from losses to hedge fund investors, losses to common stock investors, and losses to investors purchasing collateralized debt obligations from Bear Stearns Asset Management, including Bank of America, which as of June 30 was seeking "approximately $535 million" in damages, as of June 30, according to JPMorgan's 10-Q filing.

So JPMorgan could just throw the new lawsuit onto the pile of festering Bear Stearns litigation, however, this time it is different. Schneiderman has the "bully pulpit" that goes along with his position, and the timely action as part of the Mortgage-Backed Securities Working Group of federal and state prosecutors formed by President Obama in January, fits in nicely leading into the November elections. "Wall Street as bad guy," continues to sell, for opportunistic politicians who continue to escape blame for the credit crisis.

"This is a politically motivated charge ," said Keith Bliss, a senior vice president of Cuttone, Inc., speaking on the floor of the New York Stock Exchange. Bliss also called the charge "a shakedown," and pointed out that "a lot of the attorneys general around the country are now bumping up against statutes of limitations."

Bliss added that it was "really odd" to see JPMorgan sued for the activities of Bear Stearns, when government officials were "on their knees begging JPMorgan to buy Bear Stearns so we wouldn't have this massive financial collapse."

Well all's fair when it comes to politics, and no good turn goes unpunished.

Bank of America (BAC - Get Report) faced similar pressure, when the company's executives got cold feet after agreeing in September 2008 to purchase Merrill Lynch for roughly $50 billion. With plenty of government pressure and assistance, Bank of America, of course, closed the Merrill deal.
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