JPMorgan Chase & Co. (JPM:US) was sued for alleged securities fraud in its role as successor of Washington Mutual Bank by the National Credit Union Administration board, the liquidator of three failed federal credit unions.
The agency said in a complaint filed yesterday in federal court in Kansas City, Kansas, that the offering documents for residential mortgage-backed securities underwritten or sold by Washington Mutual to the credit unions contained false and misleading information about the underlying home loans.
The Alexandria, Virginia-based agency is responsible for recovering losses to minimize the costs to its industry-funded stabilization fund. Its complaint was filed as the liquidator of wholesale credit unions that collapsed and were placed in conservatorship in 2009 and 2010.
“The damage caused by the actions of firms like Washington Mutual has been extremely expensive to contain and repair, and that job isn’t finished, yet,” NCUA Board Chairman Debbie Matz said in a statement.
Representatives of New York-based JPMorgan didn’t immediately return a call for comment yesterday on the lawsuit.
Yesterday’s complaint follows similar lawsuits the credit union agency filed against other banks, including one last month against JPMorgan as successor of Bear Stearns & Co., and those previously against Barclays Plc (BARC), UBS AG (UBS:US), Credit Suisse Group AG, Royal Bank of Scotland Group Plc, the Wachovia Corp. unit of Wells Fargo & Co. (WFC:US) and Goldman Sachs Group Inc. (GS:US)
Barclays filed papers in November seeking dismissal of the lawsuit against it, arguing the claims were filed too late.
Deutsche Bank AG, Citigroup Inc. (C:US) and HSBC Holdings Plc (HSBA) agreed in November 2011 and March to pay a combined $171 million to resolve similar accusations, with $145 million from Deutsche Bank, $20.5 million from Citigroup and $5.3 million from HSBC. The banks didn’t admit or deny wrongdoing.
The case is NCUA v. JPMorgan, 13-02012, U.S. District Court, District of Kansas (Kansas City).
To contact the reporters on this story: Edvard Pettersson in Los Angeles at firstname.lastname@example.org; Jesse Hamilton in Washington at email@example.com
To contact the editors responsible for this story: Michael Hytha at firstname.lastname@example.org; Maura Reynolds at email@example.com