The U.S. Supreme Court told a lower court to take another look at a ruling that let the National Credit Union Administration sue a group of banks for allegedly deceiving investors about mortgage-backed securities.
The justices today ordered reconsideration of the ruling in light of a decision they reached earlier this month on the deadlines for filing some environmental suits.
The NCUA sued banks including units of Wells Fargo & Co. (WFC:US) and (RBS:US)Royal Bank of Scotland Group Plc (RBS) after the agency took over two corporate credit unions. The NCUA says those credit unions invested $1.74 billion in mortgage-backed securities, many of which the agency says were riskier than the offering documents indicated.
The banks contend that federal securities law imposes a firm three-year deadline for suits -- a deadline they say the NCUA missed. A federal appeals court in Denver disagreed, citing a provision in a 1989 law that extends the time for a government regulator to sue on behalf of a failed financial institution.
In ordering reconsideration, the justices pointed to a June 9 decision in a case involving environmental suits.
NCUA has filed similar lawsuits against units of Goldman Sachs Group Inc. (GS:US), JPMorgan Chase & Co. and other banks.
The Supreme Court case is Nomura Home Equity Loan v. National Credit Union Administration, 13-576.
To contact the reporter on this story: Greg Stohr in Washington at email@example.com
To contact the editors responsible for this story: Patrick Oster at firstname.lastname@example.org Mark McQuillan, Laurie Asseo