By Erin Geiger Smith
Oct 4 The U.S. credit union regulator filed a
lawsuit on Thursday against Credit Suisse Securities (USA)
, alleging misrepresentations in the
underwriting and sale of mortgage-backed securities.
The National Credit Union Administration said in a statement
that three failed credit unions paid more than $715 million for
the securities at issue in the lawsuit, which filed in U.S.
district court in Kansas.
"Credit Suisse is one of several firms that sold faulty
securities to corporate credit unions, which led to their
collapse," the agency said.
The suit alleges that Credit Suisse underwrote and sold
securities that were "significantly riskier than represented" in
related prospectuses and registration statements.
The agency has been trying to recover losses related to the
failure of five institutions that were seized by NCUA in 2009
and 2010 after they ran into trouble due to the crumbling
The failed credit unions that purchased the securities are
the U.S. Central Federal Credit Union, Western Corporate Federal
Credit Union, and Southwest Corporate Federal Credit Union.
Corporate, or wholesale, credit unions provide services to
retail credit unions including lending, as well as check and
payment clearance services.
Credit Suisse declined to comment.
The NCUA previously filed lawsuits against other financial
institutions including JP Morgan Chase & Co's JPMorgan
Securities, Royal Bank of Scotland Group Plc's RBS
Securities, and Goldman Sachs.
In November 2011, the NCUA negotiated settlements totaling
just over $165 million with Citigroup and Deutsche Bank
The lawsuit is National Credit Union Administration Board v.
Credit Suisse Securities (USA), et al, U.S. District Court for
the District of Kansas, No. 12-02648.