J.P. Morgan Chase—specifically the Bear Stearns unit—has been charged in a civil lawsuit with alleged fraud in the sale of mortgage-backed securities.

It’s interesting to note that this case was filed by New York Attorney General Eric Schneiderman as a civil—not criminal—lawsuit. The lawsuit alleges Bear Stearns defrauded investors in securities issued in 2006 and 2007 and knew the mortgages were highly likely to default. Clearly, there is much benefit of hindsight here.

According to The Wall Street Journal (subscription required), New York State’s Martin Act doesn’t require prosecutors to prove a firm intended to defraud investors to win a case. J.P. Morgan Chase has responded in the press that the New York prosecutor is relying on claims already made by private plaintiffs and not his own work.

This will be a highly publicized case, no matter what the outcome. Stay tuned.