Saying that the facts “’lay to rest any notions of chance and instead evince deliberate – indeed, malevolent – design,’’ the $3.1 billion Space Coast Credit Union on Tuesday sued Barclays and State Street Securities, accusing the firms of selling a collateralized debt obligation designed to fail, and caused the former Eastern Financial CU to lose millions of dollars.

Space Coast said a predecessor credit union, Eastern Financial bought $10 million of ‘AA’ rated notes issued by the Markov CDO at 94.2 cents on the dollar, and that the entire investment was lost. Eastern Financial CU later collapsed, the largest natural person credit failure to date. Space Coast CU, based in Melbourne, Fla., acquired Eastern Financial’s assets when it took over the operations of the failed credit union.

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