NCUA sues Royal Bank of Scotland, again
The National Credit Union Administration filed another lawsuit in California against the Royal Bank of Scotland (RBS). The administration acts as a federal insurer and liquidator of credit union liabilities. In the suit, the NCUA is alleging that a failed credit union, WesCorp, bought securities from RBS where the risk of losses were not appropriately disclosed. This law suit follows two similar legal proceedings filed in the Federal District Court of Kansas June 20 against J.P. Morgan Securities(JPM) and RBS. The NCUA said added in a statement today that it is not finished pursuing litigation in order to recover some of these losses. "NCUA continues to carry out our responsibility to do everything reasonable in our power to seek maximum recoveries," said NCUA board chairman Debbie Matz. "By these actions we intend to hold responsible parties accountable." "We expect to file additional actions, seeking damages in the billions of dollars," Matz added. "Those who caused the problems in the wholesale credit unions should pay for the losses now being paid by retail credit unions." This action seeks damages in excess of $629 million, totaling more than $1.5 billion when added to the damages sought in the previous filings. The NCUA is also alleging that the securities RBS sold to WesCorp contributed to its collapse. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.