Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Judge Upholds, Dismisses Some NCUA JP Morgan Claims
KANSAS CITY, Kan. (9/5/13)--The National Credit Union Administration's (NCUA) case against JP Morgan and related defendants, one of many cases in which the agency alleges financial firms oversold the value of certain mortgage backed securities (MBS), can move forward. U.S. District Court for the District of Kansas Judge John Lungstrum this week dismissed some charges filed by the agency, while upholding others.

"These decisions were not unexpected, and we are pleased that all four cases are proceeding," the NCUA said. JP Morgan is being charged as a successor-in-interest to Washington Mutual Bank, and WaMu Capital Corp., Long Beach Securities Corp., and WaMu Asset Acceptance Corp. are also named in the JP Morgan suit.

Lungstrum in his opinion denied a defendant motion to dismiss the NCUA's claims against them, and their request to vacate some claims due to a lack of subject matter jurisdiction. However, the court upheld defendant requests that some NCUA claims be dismissed due to statute of limitations issues.

JP Morgan issued and underwrote MBS's that were sold to U.S. Central FCU, Western Corporate FCU and other corporates from 2006 to 2007. The corporates collapsed in 2009, and NCUA, as their liquidating agent, sued a number of Wall Street banks who issued or underwrote the securities that contributed to the corporates' collapse.

NCUA's lawsuits, including the one against JP Morgan, allege the banks made numerous misrepresentations and omissions of material facts in the documents offered the failed corporates. The agency alleges systemic disregard of underwriting guidelines stated in the offering documents and says the alleged misrepresentations caused U.S. Central and WesCorp to believe the risk of loss on the investments was minimal, when in fact, the risk was substantial.

JP Morgan and its co-defendants have claimed that NCUA did not file these MBS cases early enough. The NCUA on Wednesday noted that these timing issues are currently being discussed in related cases in the Tenth Circuit Court of Appeals.

"This is lengthy and complex litigation, and NCUA intends to continue to aggressively pursue responsible parties," the agency added.

In addition to JP Morgan and RBS Securities, NCUA has filed lawsuits against Wachovia Capital Markets and Wells Fargo, Barclay's Capital Inc., Goldman Sachs, and UBS Securities. The agency has already settled claims of more than $170 million with Citigroup, Deutsche Bank Securities and HSBC.


RSS print
News Now LiveWire
July 's Fed Bank's "FedFocus" has some interesting articles: incl cost/benefits of $1 currency 2 coin conversion ttp://tinyurl.com/nybmnhh
16 hours ago
Do you wish you were a News Now subscriber? Go here: http://t.co/7evfBSjeMx
17 hours ago
Financial education for student body key part of Altura #creditunion, UC-Riverside partnership #NewsNow http://t.co/Xp6OJd66o6
18 hours ago
.@VTcreditunions gains 200 new FB followers in just 2 wks to reach 1,000 http://t.co/I89xJcv4Jg
18 hours ago
.@CUNA is testifying on reg relief Tues,July 15 at 2 p.m. be4 Hs Fin Serv Subc. Here is the agenda and witness list: http://t.co/yBRhlmdqHt
21 hours ago