Oct. 9, 2012 – Credit Suisse has become the eighth investment firm to be sued by NCUA to recoup losses relating to the sale of mortgage-backed securities, with the agency filing a complaint last week in Federal District Court in Kansas.
As with previous suits, NCUA is charging that the company broke federal and state law by making numerous misrepresentations and omissions of material facts in the offering documents of the securities sold to corporate credit unions. In the case of Credit Suisse, those corporate credit unions included U.S. Central FCU, Western Corporate FCU and Southwest FCU. All three corporates subsequently failed.
In its 156-page complaint, which is available online, NCUA says that the three corporates paid over $715 million for the securities.
In addition to filing suits against J.P. Morgan Securities, LLC, RBS Securities, Goldman Sachs, Wachovia, UBS Securities, and Barclay’s, NCUA has already settled claims worth more than $170 million with Citigroup, Deutsche Bank Securities and HSBC. The agency is the first federal regulatory agency for depository institutions to recover losses from such investments.
NAFCU has long urged NCUA to pursue all legal means necessary against responsible parties to recover losses associated with corporate stabilization.