Court won't dismiss NCUA claims against RBS
Sept. 14, 2013 – A federal district court on Thursday rejected RBS Securities’ motion to dismiss NCUA’s claims of misleading statements about securities the firm sold to the now-defunct U.S. Central Corporate FCU - action that allows the case to move forward.
NCUA cited federal securities law and state law in Kansas, where U.S. Central was based, alleging untrue statements or omissions of material facts relating to each of the 29 residential-mortgage-backed securities the firm sold to the corporate. The court initially decided to reject part and grant part of NCUA’s claim but allowed the agency to file an amended complaint.
Thursday’s ruling pertains to the amended complaint, which has been combined with other cases filed by NCUA against firms that sold securities that later went south and helped sink five corporates, including U.S. Central and Western Corporate FCU.
NAFCU is strongly encouraging NCUA to keep using all the tools it has to recover losses and help mitigate the costs of corporate stabilization for federally insured credit unions.