The NCUA scored a major victory in the 10th U.S. Circuit Court of Appeals in Denver Aug. 19 it its quest to recover losses from big banks that sold mortgage backed securities to failed corporates.
The ruling, which was prompted by a directive from the U.S. Supreme Court in June, sided with the NCUA's claim that the three-year time frame defendants have to file loss claims began when it seized three failed corporates, not when the corporates purchased the securities.
The NCUA can now move forward with lawsuits filed in Kansas on behalf of U.S. Central Federal Credit Union and Western Corporate Federal Credit Union seeking damages over $1.74 billion in securities the two failed corporates purchased. The NCUA alleged in that case and in others that investment banks, including such big names as Wells Fargo and Goldman Sachs, knowingly sold securities to corporate credit unions without disclosing significant credit risk in the mortgages supporting them.
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