JPMorgan Loses Bids to End NCUA’s Securities Sales SuitsAndrew Harris
JPMorgan Chase & Co. failed to persuade a U.S. judge to entirely dismiss three different lawsuits over alleged misrepresentations made in the sales of mortgage-backed securities to credit unions that later failed.
The lawsuits were filed by the National Credit Union Administration board as it attempts to recoup losses from the collapse of the credit unions it regulated and ultimately liquidated.
U.S. District Judge John W. Lungstrum in Kansas City, Kansas, today issued three rulings, plus a decision partly denying a similar bid for relief by a unit of UBS AG. Lungstrum allowed each of the four cases to go forward.
The judge said he has eight NCUA cases before him.
The regulator’s 2011 suit against JPMorgan Securities LLC, a brokerage unit of the New York-based lender, was one of the first such suits filed by NCUA. Lungstrum’s dismissal of claims concerning two such securities certificates included permission for the agency to amend its complaint and refile.
The JPMorgan unit was accused by the NCUA of selling the failed credit unions almost $213 million of mortgage bonds using sales documents that contained untrue statement or omitted important information.
In a case concerning Washington Mutual Bank before it failed and JPMorgan Chase assumed some of its liabilities, Lungstrum concluded that while some of the regulator’s claims were filed too late, the remainder of the case could continue.
He reached a similar conclusion in tossing some claims in a case filed last year against JPMorgan unit Bear Stearns Cos., which allegedly sold $3.6 billion in securities to credit unions that failed.
Brian Marchiony, a JPMorgan Chase spokesman, declined to comment on the today’s rulings.
The cases are National Credit Union Administration Board v. JPMorgan Securities LLC, 11-cv-2341; National Credit Union Administration Board v. UBS Securities LLC, 12-cv-2591; National Credit Union Administration Board v. Bear Stearns & Co., 12-cv-2781; and National Credit Union Administration Board v. JPMorgan Chase N.A., as successor-in-interest to Washington Mutual Bank, 13-cv-2012, U.S. District Court, District of Kansas (Kansas City).