Long Beach Securities Corp., a subsidiary of JPMorgan Chase, filed a lawsuit last week against the National Credit Union Administration for allegedly breaching a $1.4 billion settlement agreement over toxic residential mortgage-backed securities, according to an article in the Credit Union Times by Peter Strozniak.
The article explained that the current lawsuit claims a "breach" of a 2013 settlement agreement. In the 2013 settlement, the article alleges, the NCUA agreed to release JPMorgan from additional liabilities in regard to the below bond transactions. The NCUA claimed in the original lawsuit JPM missold the investment to credit unions.
From the article:
At the time the NCUA reached a settlement agreement with JPMorgan, the federal agency was suing Credit Suisse Securities and Credit Suisse First Boston Mortgage Securities Corp. over investments in two residential mortgage-backed securities transactions that involved Long Beach Securities Corp. According to the lawsuit, these transactions were covered in the 2013 JPMorgan settlement agreement with the NCUA.
As part of the settlement, JPMorgan and NCUA take steps to hold Long Beach Securities harmless — a legal term for when a party is released from future litigation.
Now, JPM is claiming in the breach that the NCUA is not keeping up its end of the bargain.