Published September 25, 2012
The National Credit Union Administration filed a lawsuit against a U.S. subsidiary of Barclays on Tuesday. The U.S. credit regulator alleges the bank misrepresented sales of $555 million of mortgage-backed securities to two credit unions that failed during the U.S. financial meltdown.
The NCUA alleges Barclays omitted material facts in offering documents of the securities it sold to the no longer existent credit unions. In addition, it claims Barclays disregarded underwriting standards provided in the offering documents, causing the credit unions to see the securities risks as minimal.
In a statement on Tuesday, NCUA Chairman Debbie Matz said, “We are working to hold Barclays, and other responsible parties, accountable for their actions.”
The suit against Barclays is the sixth the NCUA has pending against banks on the issue of misrepresented securities sales to U.S. Central Federal Credit Union and Western Corporate Federal Credit Union. The NCUA has filed suits against J.P. Morgan Chase (JPM), Royal Bank of Scotland (RBS) Goldman Sachs (GS), Wachovia (which was subsequently bought out by Wells Fargo), and UBS (UBS).
In addition, Dow Jones reports the NCUA settled for more than $170 million with units of Citigroup (C), Deutsche Bank (DB), and HSBC (HBC).