The National Credit Union Administration (NCUA) has filed a lawsuit in Federal District Court in Kansas against Barclay's Capital, Inc.
NCUA's suit alleges Barclay's, the U.S. subsidiary of the British financial services firm, violated federal and state securities laws through misrepresentations in the sale of mortgage-backed securities to U.S. Central Federal Credit Union and Western Corporate Federal Credit Union. NCUA's complaint alleges Barclay's made numerous misrepresentations and omissions of material facts in the offering documents of the securities sold to the corporate credit unions, which later failed.
‘Trust and accountability are two cornerstones of our financial system,’ says NCUA Board Chairman Debbie Matz. ‘As clearly outlined in our complaint, Barclay's violated that trust by issuing faulty disclosures on securities underwritten by the firm. As a result, two corporate credit unions collapsed, and the entire credit union industry experienced a crisis. Since then, NCUA has successfully worked to restore stability to the credit union system. Now we are working to hold Barclay's, and other responsible parties, accountable for their actions.’
NCUA has previously filed similar actions against J.P. Morgan Securities LLC, RBS Securities, Goldman Sachs, Wachovia and UBS Securities. NCUA has already settled claims worth more than $170 million with Citigroup, Deutsche Bank Securities and HSBC, making it the first federal regulatory agency for depository institutions to recover losses from investments in faulty securities on behalf of failed financial institutions.