US National Credit Union Association (NCUA) has charged Credit Suisse (US) for violating federal and state securities laws over trading of mortgage-backed securities to three credit unions.
The firm has been accused for falsifying facts related to underwriting and selling mortgage-backed securities to US Central Federal Credit Union (US Central), Western Corporate Federal Credit Union (WesCorp) and Southwest Corporate Federal Credit Union (Southwest).
A case has been filed in Federal District Court in Kansas in connection with the aforesaid matter, which led to all the three unions paying more than $715m for the securities to the Swiss lender, the US agency said.
NCUA Board chairman Debbie Matz said, "These Wall Street firms ran a bait and switch operation, and the effects were felt not only in credit unions, but throughout the financial industry.
"NCUA and credit unions have successfully worked together to restore stability to the credit union system. Now we are holding responsible parties, like Credit Suisse, accountable for their actions."
As a liquidating agent for US Central, WesCorp and Southwest, NCUA has sought for recoveries from responsible parties in order to lessen the cost of any failure to its insurance funds and the credit union industry.
It has already settled claims more than $170m with Citigroup, Deutsche Bank Securities and HSBC and also sued JP Morgan Securities, RBS Securities, Goldman Sachs, Wachovia, UBS Securities, and Barclay with similar charges.