NCUA Suing Goldman Sachs to Recover Corporate CU Losses
The NCUA filed suit Tuesday against investment bank Goldman Sachs seeking damages of more than $491 million and alleging misrepresentations by the firm when selling mortgage-backed securities to U.S Central and Western Corporate federal credit unions.
It’s the fourth suit stemming from the collapse of several corporate credit unions filed by the NCUA. The agency is seeking damages of almost $2 billion.
The NCUA alleges, in the lawsuit filed in Los Angeles, that the misrepresentations caused U.S. Central and WesCorp to believe the risk of loss associated with the investment was minimal.
“NCUA continues to carry out our responsibility to do everything reasonable in our power to seek maximum recoveries,” NCUA Chairman Debbie Matz said in a statement. “Those who caused the problems in the wholesale credit unions should pay for the losses now being paid by retail credit unions.”
In July, the NCUA sued RBS Securities for $685 million in Los Angeles alleging that that firm misled WesCorp when it sold it mortgage-backed securities that led to its ultimate collapse.
In June, the NCUA sued RBS Securities for $565 million in damages and a lawsuit filed against J.P. Morgan Securities seeks $278 million in damages. Both those lawsuits were filed on June 20 in Kansas City.