| WASHINGTON, June 16
WASHINGTON, June 16 The U.S. Supreme Court on
Monday threw out an appeals court ruling that had allowed a
lawsuit by a federal regulatory agency to go forward against
several banks over their role in selling mortgage-backed
securities to now-failed credit unions.
The court's decision means the Denver-based 10th U.S.
Circuit Court of Appeals will be forced to reconsider whether
the National Credit Union Administration's litigation against
the lenders, including units of Royal Bank of Scotland
PLC and Wells Fargo & Co, can continue.
The other defendants in the case are units of Nomura
Holdings Inc and Novation Companies Inc.
The court threw out the appeals court's earlier ruling in
favor of the agency in light of its decision last week in a case
called CTS v. Waldburger, which raised a similar legal question
about the timing of lawsuits.
The National Credit Union Administration is the independent
federal agency that regulates, charters and supervises federal
The regulator had sued on behalf of two failed credit
unions, U.S. Central Federal Credit Union and Western Corporate
Federal Credit Union. The regulator has separate litigation
pending against other defendants over securities sold to other
failed credit unions.
The government agency placed several credit unions into
conservatorship following losses they incurred when what were
considered low-risk investments in 2006 and 2007 were
significantly downgraded following the 2008 financial crisis.
The regulator says the lenders made misrepresentations, in
violation of federal securities laws, when selling the
The lenders sought high court review after the 10th U.S.
Circuit Court of Appeals ruled in August 2013 that the regulator
did not wait too long before filing its lawsuit.
The case is Nomura et al v. NCUA, U.S. Supreme Court, 13-576
(Reporting by Lawrence Hurley; Editing by Will Dunham and Grant