Saying that it failed to disclose the risks to two now-defunct corporate credit unions, the NCUA on Tuesday filed suit against the company formerly known as Wachovia Securities.
The suit alleges that residential mortgage backed securities the firm sold U.S. Central and WesCorp were "significantly riskier'' than represented in the offering documents and the securities were "destined from inception to fail."
U.S. Central bought $43.9 million in RMBS from Wachovia and $78.1 million in RMBS underwritten by Wachovia. WesCorp bought $44.3 million of RMBS from Wachovia, the suit said.
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