A $100 million collateralized debt obligations lawsuit filed bySpace Coast Federal Credit Union against several Wall Street banksand ratings agencies was dismissed without prejudice by a federalcourt on Monday.

According to a ruling from U.S. District Judge James I. Cohn,the complaint from the $3 billion Space Coast FCU in Melbourne, Fla., had to be dismissed becauseit did not plead the defendants' alleged fraud with particularity,nor did it state a plausible claim for relief.

Cohn said Space Coast failed to plead in detail how eachdefendant defrauded Eastern Financial Florida Credit Union, the cooperative itacquired that purchased the CDOs.

However, Cohn said Space Coast still has an opportunity toprovide more details “with a plausible factual basis, the fraudthat each defendant committed in connection with the CDOs owned byEastern,” the judge wrote in his ruling.

In its complaint filed in early 2012, Space Coast said the CDOsled to a phony demand for residential mortgage loans, which alsoled to creating one of the state's largest housingcatastrophes.

Space Coast said creating and selling CDOs revolved around shoe-horning residential mortgagesecurities into Moody's and S&P's credit rating models togenerate investment grade ratings, according to the CU's suit.Investors were misled because they relied on the credit ratings,the credit union said.

In May 2011, Space Coast filed a suit against Barclays saying the $10 million worth of the firm's Markov CDOsbought by Eastern Financial were based on riskier synthetic assets. Thepurchase allegedly led to losses on the entire investment.

Last spring, the Wall Street banks told a federal court judge inMiami that Eastern Financial was warned about the risks associated with CDOs.

“Each of the 12 CDOs at issue here was offered pursuant to aseparate offering circular. These offering circulars contained pageafter page of disclosures and disclaimers, explaining to EasternFinancial the nature and risks of the particular CDO investments,the place of each tranche within each CDO, and the credit ratingexpected to be assigned by the rating agencies of each tranche,”according to a joint motion from the banks and ratings agencies todismiss the suit.

Among the banks named in the Space Coast suit were Wells FargoSecurities, formerly known as Wachovia Capital Markets, J.P. MorganSecurities, formerly known as Bearn Stearns & Co. Inc., MerrillLynch and its subsidiary, Merrill Lynch Home Loans, UBS Securities,and Barclay's Capital Inc. Other defendants named were Richard S.Fuld Jr., former chairman/CEO of Lehman Brothers, and Moody'sInvestors Service Inc.