WASHINGTON—NCUA has won a victory in litigation it is pursuing against several Wall Street banks after the U.S. Supreme Court declined to hear the banks’ appeal of the lawsuit.
NCUA filed the suit against units of Royal Bank of Scotland, Wells Fargo, Nomura Holdings, and Novation Companies, over their alleged roles in the sale of mortgage-backed securities to two failed corporate credit unions, U.S. Central and Western Corporate FCU (WesCorp). Losses on those investments helped lead to the demise of both corporates and to losses to the National Credit Union Share Insurance Fund.
NCUA has been active in pursuing a number of Wall Street banks over failed securities, has a number of ongoing suits, and has received multi-million-dollar settlements in other cases. In most cases NCUA has argued that securities were misrepresented to the corporates in violation of federal securities laws.
"We are pleased with the justices' decision, and our litigation adjacent all of the banks that sold the corporate faulty securities will continue," NCUA spokesperson John Fairbanks told CUToday.info.
The latest appeal to the Supreme Court is actually the second time the banks have sought relief in the highest court on the decision made by the 10th U.S. Circuit Court of Appeals. The Supreme Court had previously remanded the 10th U.S. Circuit Court's decision back to the court, which in turn said it had ruled correctly. The banks went back to the Supreme Court again, but in declining to hear the case ruled that they believed the 10th U.S. Circuit Court of Appeals had gotten the decision right. At issue was whether or not NCUA had waited to long to file its lawsuit. sent the , as well. The banks were arguing that the 10th U.S. Circuit Court of Appeals had erred in ruling that NCUA had not waited too long before filing its lawsuit. Wescorp and U.S. Central were placed into conservatorship in 2009.