JPMorgan (JPM) Accused of Fraud by AllState (ALL)

JPMorgan (NYSE:JPM) had a lawsuit filed against it in New York State Supreme Court today by AllState (NYSE:ALL), citing fraud.

According to the complaint, mortgage-backed securities sold to them by Bear Stearns, Washington Mutual and JPMorgan were in fact "toxic," while being marketed as highly rated safe securities.

AllState asserted the banks "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."

JPMorgan acquired Bear Stearns and Washington Mutual in 2008.

JPMorgan was trading at $48.05, gaining $1.23, or 2.63 percent, as of 1:05 PM EST.