If current suits and investigations produce a legal precedent, will the NCUA sue the three major credit ratings agencies to recover losses suffered by Western Corporate Federal Credit Union and others?
"In connection with any problem case that involves NCUA intervention and significant cost to the NCUSIF, NCUA evaluates all avenues of recovery," said John McKechnie, director of public and congressional affairs.
Thursday, California Attorney General Jerry Brown issued subpoenas to Standard & Poor's Ratings Services, Moody's Investors Service and Fitch Ratings, ordering them to provide information on their ratings processes by Oct. 19. Brown is investigating whether the firms violated California law. Attorneys general Andrew Cuomo of N.Y. and Richard Blumenthal of Conn. previously announced their own investigations.
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The California Public Employees' Retirement System filed suit July 15 against the three ratings agencies over three structured investment vehicles that collapsed in 2007 and 2008 and resulted in a loss to the pension fund of $1 billion. CalPERS alleges the firms committed "negligent misrepresentation" when they published "wildly inaccurate and unreasonably high" ratings on the SIVs.
In September, a federal judge ruled ratings agencies can't use freedom of speech as a legal defense.
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