Former officers and directors of WesCorp Federal Credit Union told a federal court yesterday that National Credit Union Administration's (NCUA) growing legal battle with Wall Street banks over securities they sold to the failed corporate illustrates they could not have known the securities were faulty when they made the decision to buy them, thereby nullifying NCUA’s multi-billion dollar negligence suit against them.
The WesCorp figures told the court that NCUA’s latest suit claiming RBS Securities mislead WesCorp into purchasing 'AAA'-rated RMBS “are admissions that undercut and render implausible the NCUA’s allegations in this case in that the Director Defendants acted “clearly unreasonably” under the circumstances known to them at the time.”
The WesCorp figures made identical claims last month after NCUA sued RBS and JPMorgan Securities and claimed the two Wall Street banks misrepresented the securities they sold to WesCorp.
“The NCUA’s admission will make it even clearer that the Director Defendants and Officer Defendants made decisions based on the information available at the time,” the WesCorp figures argued in their new pleading. “If that information was less than the truth, it was, at least according to NCUA, the fault of others, and not the fault of the defendants here.”
The WesCorp pleadings come as NCUA said this week it expects to file as many as 10 suits against the Wall Street underwriters of securities sold to the failed corporate credit unions.
The WesCorp figures point to numerous allegations made by NCUA in this week’s suit against RBS, like:
“At the time of purchase, WesCorp was not aware of the untrue statements or omissions of materials facts in the Offering Documents of the RMBS.”
“In sum, the disregard of underwriting standards was pervasive across originators.”
“WesCorp purchased the Certificates pursuant to and traceable to the defective registration statements.”
“At the time WesCorp purchased the Certificates, it did not know of the untrue statements and omissions contained in the registration statement.”
“In short, the RBS Complaint–like the JPMorgan Complaint,” asserted the WesCorp figures, “contains admissions by the NCUA that render implausible its allegations against the defendants here.”