DENVER (1/17/13)--Another securities industry group plans to file an amicus brief supporting Wall Street banks in lawsuits brought by the National Credit Union Administration's against them over their sale of residential mortgage backed securities to corporate credit unions.
The Securities Industry and Financial Markets Association, which represents securities firms, banks and asset managers, filed a motion Tuesday in the U.S. Court of Appeals for the Tenth Circuit in Denver seeking more time to prepare and file its brief. SIFMA seeks a four-week deadline extension--to Feb. 15.
So far those seeking appeal include RBS Securities Inc., Wachovia Capital Markets LLC and Wachovia Mortgage Loan and Trust LL. Also involved are Nomura Home Equity Loan Inc., Novastar Mortgage Funding Corp., Financial Asset Securities Corp., and RBS Acceptance Inc.
They oppose a July 25 decision from the U.S. District Court for the District of Kansas. They also allege that NCUA did not file its lawsuits within the time limits allowed by law.
NCUA's lawsuits against the banks alleged they misrepresented and omitted material facts in the documents offered to U.S. Central FCU and Western Corporate FCU, and had systemic disregard of underwriting guidelines. The misrepresentations caused the corporates to believe the investment risk was minimal, when it was substantial, said NCUA. The corporates collapsed in 2009 and NCUA is suing as the liquidating agent.
The lower court ruled NCUA's lawsuit could proceed and that certified certain controlling legal questions in the suit. They include whether the Federal Credit Union Act's "extender" statute--which allows additional time in certain circumstances to file a claim in court--applied to the three-year statutes of repose for filing a case in court, including the three-year statute of repose in the federal Securities Act of 1933; and whether the extender statute applies to federal statutory claims.