The Federal District Court in Kansas denied most motions from defendants to dismiss the ""National Credit Union Administration"":http://www.ncua.gov/Pages/default.aspx (NCUA) lawsuits over losses from mortgage-backed securities purchased by U.S. Central Federal Credit Union (FCU).
[IMAGE] [COLUMN_BREAK]NCUA Board Chairman Debbie Matz commented on the decision in July, stating, ""NCUA is pleased that the court recognized the central merits of our complaints and allowed the cases to move forward. The Wall Street firms that created and sold these securities materially misrepresented the inherent level of risks to investors.""
Matz added they will continue to vigorously pursue these lawsuits, and the others previously filed, and said NCUA has a duty to to maximize recoveries from responsible parties as liquidating agent for the defunct U.S. Central FCU.
NCUA filed two lawsuits against RBS Securities, Wachovia, and nine others concerning mortgage-backed securities purchased by U.S. Central, according to a statement from NCUA. The lawsuits alleged the defendants violated federal and state securities laws and misrepresented the risks of the securities when selling to U.S. Central.
The court granted part of the defendants' motions to dismiss, resulting in 80 percent of the claims moving forward.
NCUA filed similar lawsuits against J.P. Morgan Securities and Goldman Sachs. The agency has previously settled claims of about $170.75 million with Citigroup, Deutsche Bank Securities, and HSBC.