Appeals Victory in Hand, NCUA Vows to Continue Wall Street Suits
The NCUA said Tuesday night that it will now move forward with its lawsuits against Wall Street investment banks it said sold toxic securities to corporate credit unions, causing their multi-billion dollar collapses.
The agency was reacting to a ruling from the U.S. 10th Circuit Court of Appeals that said the NCUA did fall under the federal “extender” statute that allowed the NCUA more time to file lawsuits in the collapse of the five corporate credit unions in the last years of the previous decade.
In a statement, Board Chair Debbie Matz said the NCUA was pleased with the court’s decision.
“We will continue to pursue our claims against firms that sold faulty mortgage-backed securities to corporate credit unions,” Matz said. “As liquidating agent for the corporate credit unions, NCUA has a duty to maximize recoveries from responsible parties in order to limit losses to federally insured credit unions.”
The appeals court upheld a federal court that ruled last year in Kansas, home of the now-defunct U.S. Central, that the agency’s securities law claims were valid, ruling against the defendants’ contention that the NCUA had taken too long to file the suits.
The NCUA has filed lawsuits against Barclays Capital, Credit Suisse, Goldman Sachs, J.P. Morgan Securities, RBS Securities, UBS Securities, Wachovia, Washington Mutual and Bear, Stearns,alleging violations of federal and state securities laws in the sale of mortgage-backed securities to the five corporate credit unions.
Settlements totaling $335 million already have been reached with Bank of America, Citigroup, Deutsche Bank Securities and HSBC.