Calling it one more bait-and-switch operator, the NCUA said itfiled suit on Thursday against Credit Suisse Securities, chargingthat the Swiss bank subsidiary misrepresented the $715 billion inmortgage-backed securities it sold to three corporates, causingtheir collapse.

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The suit in federal court in Kansas City, Kan., is the latestfiled by the agency against securities firms and alleges thatCredit Suisse violated state and federal securities in underwritingand sale of the securities to U.S. Central, WesCorp and SouthwestCorporate.

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Similar actions already have been filed against J.P. MorganSecurities, RBS Securities, Goldman Sachs, Wachovia, UBS Securities and Barclay's. More than $170 million in claims have been settledwith Citigroup, Deutsche Bank Securities and HSBC, the first suchsettlements by a federal regulator for depository institutions, theNCUA said.

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“These Wall Street firms ran a bait-and-switch operation, andthe effects were felt not only in credit unions, but throughout thefinancial industry,” said NCUA Board Chairman Debbie Matz in a statement. “NCUA andcredit unions have successfully worked together to restorestability to the credit union system. Now we are holdingresponsible parties, like Credit Suisse, accountable for theiractions.”

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The NCUA was the liquidating agent for the three corporates andsaid it has a statutory duty to seek to recover the losses andminimize assessments credit unions must pay to the TemporaryCorporate Credit Union Stabilization Fund.

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The suit claims Credit Suisse misrepresented the securities andomitted material facts about them – and disregarded underwritingguidelines – when they were sold to the corporates, leading thebuyers to believe the risk was minimal.

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“Credit Suisse is one of several firms that sold faultysecurities to corporate credit unions, which led to theircollapse,” Matz said. The full complaint is available online.

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The 156-page complaint is available on NCUA's website.It names Credit Suisse Securities, Credit Suisse First BostonMortgage Securities Corp. and IndyMac MBS.

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