Saying that it informed the corporate credit unions of the risks and pointing to the failures of the corporates' executives and the NCUA, J.P. Morgan Securities has asked a federal judge to dismiss the agency's lawsuit against it.
The NCUA Board has failed to prove that the firm made "material misrepresentations'' to the corporate credit unions when selling them residential mortgage backed securities , according to the bank's filing. Instead, J.P. Morgan alleges that the executives of the corporates made the investments despite warnings from the bank and the NCUA that they were risky.
"Despite warnings from the offering documents, the news media and even the (NCUA) board itself, the credit unions made the informed decision to plunge the majority of their assets into residential mortgage-backed securities at the height of the housing bubble. That investment strategy – which even the (NCUA) board has condemned as 'aggressive, 'excessive' and 'unreasonable' – backfired when the housing bubble burst. The credit unions lost their 'unreasonable' wager and subsequently collapsed,'' according to the filing.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
