A federal judge declined yesterday to dismiss charges that Barclays Capital packed a CDO it sold to Eastern Financial Florida Credit Union with junk, hastening the demise of the one-time $2.4 billion credit union, the biggest natural person credit union failure ever.

U.S. Judge Louis Stanton said Space Coast Credit Union, which acquired the remnants of the huge credit union failure, and other purchasers of the $400 million of securities have made plausible fraud claims and their suit can proceed despite the Wall Street bank’s defense that it made adequate disclosures to the purchasers.

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