Will NCUA Suit Force Banks to Settle?
See you in court.
After failing to reach an agreement with two of the largest investment bank to recover losses from mortgage-backed securities sold to corporate credit unions, the NCUA last week filed civil lawsuits against RBS Securities, a Royal Bank of Scotland unit, and J.P. Morgan Securities. The agency is a total of more than $800 million.
Other government agencies have sued investment banks over their actions in the sale of mortgage-backed securities.
The day after the NCUA filed its lawsuits, the Securities and Exchange Commission announced that J.P. Morgan had agreed to pay $153.6 million to end a suit alleging that the bank failed to tell investors that a hedge fund bet against securities they were buying. Two days later, the SEC announced that Morgan Keegan had agreed to pay $200 million to resolve a suit alleging that the firm mispriced mortgage-backed bonds in conservative funds.