FDIC Files Suits Against Institutions for Securities Sold to Guaranty Bank

The ""FDIC"":http://www.fdic.gov filed three complaints against financial institutions that were involved in the sale of mortgage-backed securities to the now defunct Guaranty Bank. The FDIC became receiver for the Austin-based bank when it failed in August 2009.

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In all three complaints, the FDIC claims the defendants made false or misleading statements when issuing, underwriting, or selling the securities to Guaranty Bank. All complaints were filed in Travis County Court in Texas on August 17.

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In one complaint, Ally Securities, Goldman Sachs, Deutsche Bank Securities, JP Morgan Securities, Structured Asset Mortgage Investments II, and Bear Stearns were all named as defendants. The complaint states Guaranty paid $1.8 million for the securities that were falsely represented. The FDIC is seeking at least $900.6 million for damages.

In another complaint, JP Morgan Securities; Merrill Lynch, Pierce, Fenner & Smith; RBS securities; WAMU Asset Acceptance Corp; and WAMU Capital Corp were named as defendants. The complaint states that Guaranty Bank paid $2.1 billion for the securities. The FDIC is seeking at least $677.4 million for damages.

In the third complaint, Countrywide Securities, CWALT Inc., Countrywide Financial Corporation, Bank of America, Deutsche Bank Securities, and Goldman Sachs were listed as defendants. The complaint states that Guaranty paid $1.5 billion for securities, with the FDIC seeking at least $559.7 million for damages.

When Guaranty collapsed in 2009, it had approximately $13 billion in assets and $12 billion in deposits as of June that year.