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State Attorney General Eric Schneiderman has filed a civil suit for fraud against JPMorgan, taking aim at the conduct of the now-shuttered Bear Stearns, which JPMorgan acquired in 2008.

Schneiderman said Bear Stearns defrauded investors, selling billions of dollars in mortgage-backed securities that it allegedly knew were deficient.

"There is one set of rules for everyone and we will not tolerate fraud," Schneiderman said.

The complaint details how the sale of securities exploded through a Bear Stearns subsidiary and goes through emails from Bear Stearns executives, acknowledging, in the bluntest of terms, that these investments were spoiled.

The suit is the first to come out of a working group created by the Obama administration to investigate the financial crisis and housing bust.

"We needed to make sure we were preserving our ability to go after the banks for the thing that got this crisis started in the first place, when they made and then securitized these loans," said Shaun Donovan, the Secretary of the U.S. Department of Housing and Development.

The group is co-chaired by Schneiderman.

Representatives of JPMorgan said the suit has nothing to do with their own behavior but that of Bear Stearns, which they say they acquired over a weekend at the behest of the U.S. government.

"We're disappointed that the New York Attorney General decided to pursue its civil action without ever offering us an opportunity to rebut the claims," the spokesperson said.

JPMorgan plans to contest the allegations. Nonetheless, some financial analysts say the suit is a step in the right direction.

"The banks know they need to be accountable for some of the actions they were taking as they were selling these problematic securities to investors," said Ryan Mack of Optimum Capital Management.

Schneiderman said there is more to come. His investigation is ongoing.