That lawsuit JP Morgan really really didn’t want you to read has just been unsealed and now we see why they used their big bank status to muscle the courts and keep it out of the public eye. The suit shows Bear executives, who all made millions and got great jobs at other banks when Bear failed, out right stole from their own investors and clients. What‘s worse is JP Morgan covered it up for the last three years.

Today at TheAtlantic.com I report how seasoned traders Mike Nierenberg and Jeff Verschleiser would sell mortgage securities to institutional investors they knew were deafulting in the first few months. Then instead of fixing the bonds during the first 90 days and giving the investors the cash they contractually were owed to make up for the crap loans, they just kept the money for themselves. Last time I looked, that’s a criminal fraud offense and clear violations of securities laws.

When I reached out to Nierenberg, who now has a similar big executive job at Bank of America, and asked his thoughts on the lawsuit his response (via a press person) was – I’m not that worried about it. Yep, he didn’t think the emails from his team calling the bonds they sold pension funds and New York-based insurers like Ambac, a ‘shit breather’ or a ‘sack of shit’, were a big deal. His official response for the story was of course ‘no comment’ but I have to wonder what his Bank of America clients are thinking today. Or if he’s worried JP Morgan will fold to pressure from regulators and ask for a claw back on all the millions of dollars he took home after cheating his own clients. Cause you know he might be kind of bummed if he doesn’t have money to spend on model and bottles like this.

Of course Nierenberg didn’t act alone, Jeff Verschleiser who ran the other half of the Bear trading group, was making sure the bank was also shorting the stocks of the companies they sold products to that were designed to fail. And then bragged in 2007 to his risk committee, run by guys like Ace Greenberg and Waren Specter, that he’d just made double-digit millions off those shorts.

A few months after JP Morgan took over a near bankrupt Bear Stearns, Verschleiser landed in the mortgage department of none other than Goldman Sachs. According to a WSJ blog he even helped his new peers prepare for congressional testimony when it was their turn to defend selling products they thought were shit and designed to lose money.

I’m not sure how JP Morgan will let this case go to trial and not sign a big fat check over to the institutional investors who’ve been suing them for years. According to the unsealed lawsuit one of the Bear traders said in his deposition this summer that ‘shit breather’ was really a ‘term of endearment’ when referring to the toxic bonds. If that’s true then what did they call the financial products they actually liked?