JPM Unit Sued by Credit Union Regulator


The National Credit Union Administration has sued a consortium of financial companies, mainly JPMorgan Chase unit J.P. Morgan Securities, alleging the violation of federal and state regulations related to the sale of mortgage-backed securities, the NCUA said in a press release.

The suit, brought in a Kansas federal court, targets the company as the successor-in-interest to Washington Mutual. That firm was acquired by J.P. Morgan Securities in 2008.

The NCUA alleges that a pair of WaMu subsidiaries, as well as other defendants "made misrepresentations in connection with the underwriting and subsequent sale of mortgage-backed securities to U.S. Central, Western Corporate and Southwest Corporate federal credit unions."

The regulator said the companies sold around $2.2 billion worth of MBSes to the credit unions. Its legal action follows a similar one filed last month against JPMorgan Chase, as the successor of Bear Stearns & Co.

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