A Barclays Plc investment-banking unit won the dismissal of the National Credit Union Administration’s lawsuit accusing it of making misleading statements about mortgage-backed securities to credit unions that later failed.
U.S. District Judge John W. Lungstrum in Kansas City, Kansas, today granted a defense motion to dismiss the case filed last year, ruling it was time-barred. The judge said he has seven similar NCUA lawsuits pending before him.
The unit formerly known as Barclays Capital was accused of violating state and federal laws in the sale of more than $555 million in securities to the U.S. Federal Credit Union and the Western Corporate Federal Credit Union in 2006 and 2007.
NCUA, an Alexandria, Virginia-based federal agency, is responsible for recovering losses to minimize the costs to its industry-paid stabilization fund.
Lungstrum ruled the regulator was required to file its claims against Barclays no later than March 20, 2012, three years after it was appointed conservator for the two failed credit unions. The case wasn’t filed until September of last year.
The judge, who in April threw out some claims in a separate NCUA lawsuit against units of Credit Suisse Group AG because they too were untimely, reaffirmed that ruling in a separate decision today.
“Congress intended that the right to sue be extinguished at the expiration of the limitations period imposed by the extender statute,” Lungstrum wrote.
“We respectfully disagree with the rulings and we are reviewing them,” John Fairbanks, a spokesman for the regulator, said in an e-mailed statement. “We will continue to vigorously pursue our claims against the parties who sold the faulty securities to the corporate credit unions.”
The case is National Credit Union Administration v. Barclays Capital, 12-cv-2631, U.S. District Court, District of Kansas (Kansas City).