Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

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
The U.S. Court of Appeals restored NCUA lawsuit v. Barclays Capital that charged misrepresenting quality of $550M IN RMBS. See News Now Wed.
12 hours ago
Registration is now open for the online livestreaming of @TheNCUA March 19 open board meeting. http://t.co/yOuqdXHlxj
16 hours ago
Registration is now open for online viewing of @TheNCUA's March 19 board meeting. https://t.co/mMZoXSFjMe
17 hours ago
.@CFPB Director Richard Cordray's testimony that he will deliver before the #HFSC this afternoon. http://t.co/NA1aEOPAeh
18 hours ago
Consumer spending flatlines, savings ramp up #Market #NewsNow http://t.co/94kPuBpMRK
19 hours ago