The NCUA on Monday filed a lawsuit seeking $685 million in damages from RBS Securities for mortgage-backed securities it sold to Western Corporate FCU.
It's the third lawsuit filed by the NCUA stemming from the collapse of five corporate credit unions and the second against RBS. The agency said Monday it plans to file between five and 10 lawsuits.
The suit filed in federal court in Los Angeles alleges that the sellers and underwriters of the questionable securities made numerous material misrepresentations in the offering documents. These misrepresentations caused WesCorp to believe the risk of loss associated with the investment was minimal, when in fact the risk was substantial.
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