United Western Bank, a subsidiary of Denver-based United Western Bancorp Inc., has filed a lawsuit for losses it incurred relating to six private-label mortgage-backed securities (MBS) that the bank purchased from Countrywide Financial Corp. in an aggregate original principal amount of approximately $108 million.
In addition to Countrywide, the defendants in this proceeding include Bank of America Corp., UBS Securities LLC and certain officers of Countrywide.
The MBS were purchased by the bank over a period beginning in October 2005 through October 2006. United Western Bank alleges in its complaint that each registration statement and prospectus supplement made by the defendants and used to market the MBS to the bank contained untrue statements of material facts and omissions of material facts with regard to Countrywide's underwriting practices and the nature and characteristics of the underlying mortgage loans in the MBS.
"If we had known about these issues with respect to the Countrywide mortgage-backed securities, we would have never purchased them in the first place," says Guy Gibson, chairman of the board of United Western. "We intend to pursue legal action against other issuers of mortgage-backed securities which the bank or the company owns."
The bank's complaint seeks an award of damages against the defendants including, but not limited to, for violations under sections 11, 12 and 15 of the Securities Act of 1933. In addition, the complaint seeks rescission regarding the purchase of each of the MBS and recovery of the consideration paid for each of the MBS, including statutory interest, pursuant to the Colorado Securities Act.
Bank of America is a named defendant in the complaint under successor liability law based upon the fact that it acquired Countrywide pursuant to a merger in 2008.
SOURCE: United Western Bancorp