The NCUA announced Monday it has filed its biggest mortgage-backed security fraud suit to date, alleging in federal court in Kansas that J.P. Morgan Securities and Bear, Stearns & Co. violated federal and state securities laws in the sale of $3.6 billion in mortgage-backed securities to four failed corporate credit unions.

The suit—the ninth the agency has filed to date—alleges Bear, Stearns & Co. made misrepresentations in connection with the underwriting and subsequent sale of MBS to U.S. Central FCU, Western Corporate FCU, Southwest Corporate FCU and Members United Corporate FCU.  

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