NCUA Continues to Seek Recoveries, Files Suit Against Wachovia

Wednesday, November 30, 2011 10:36:00 AM

ALEXANDRIA, Va. – NCUA has filed suit in Federal District Court in Kansas against Wachovia and its subsidiaries. The suit alleges violations of federal and state securities laws and misrepresentations in the sale of securities to now-failed U.S. Central Federal Credit Union (US Central) and Western Corporate Federal Credit Union (WesCorp).

This lawsuit follows several similar legal proceedings previously filed by NCUA against J.P. Morgan Securities, LLC, RBS Securities, and Goldman Sachs.

As liquidating agent for failed corporate credit unions US Central and WesCorp, NCUA has a statutory duty to seek recoveries from responsible parties in order to minimize the cost of any failure to its insurance funds and the credit union industry. NCUA recently settled claims with Citigroup and Deutsche Bank Securities, becoming the first federal regulatory agency for depository institutions to recover losses on behalf of failed financial institutions that resulted from investments in these securities.

“NCUA continues to do everything within our authority to seek maximum recoveries and ensure that those who caused the problems in wholesale credit unions pay for the losses incurred by retail credit unions,” said NCUA Board Chairman Debbie Matz. “By filing these suits, we intend to hold responsible parties accountable for their actions.”

To read the full NCUA release click here.

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