The National Credit Union Administration (NCUA) filed a second lawsuit against RBS Securities, Inc. alleging violations of federal and state securities laws and misrepresentations in the sale of securities to the failed Western Corporate Federal Credit Union (WesCorp). NCUA is seeking damages in excess of $629 million.
NCUA “claims the sellers and underwriters of the questionable securities made numerous material misrepresentations in the offering documents. These misrepresentations caused WesCorp to believe the risk of loss associated with the investment was minimal, when in fact the risk was substantial. The mortgage-backed securities experienced dramatic, unprecedented declines in value, effectively rendering WesCorp insolvent.”
NCUA anticipates filing additional lawsuits over the failure of five corporate credit unions.
Read the press release.
Where is FDIC; unable to point the finger at those they insure? Dishonesty or weakness? Banking's failure either way.
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