2013-01-08 — aljazeera.com
US federal regulators have launched a lawsuit against financial firm JP Morgan Chase & Co over the sale of risky mortgage securities that contributed to the collapse of three credit unions.
The National Credit Union Administration's (NCUA) lawsuit, filed on Friday, alleges that the country's largest bank misled US Central, Western Corporate and Southwest Corporate federal credit unions into buying $2.2b in risky mortgage securities that caused major financial losses.
The NCUA says in the lawsuit, which was filed in federal court in Kansas, that Washington Mutual, acquired by JP Morgan in 2007, misportrayed how risky the securities were and omitted key facts in sales documents.
It was the NCUA's third lawsuit against JP Morgan over losses from mortgage securities
In December, it sued the bank over $3.5b in securities sold by Bear Stearns, which JP Morgan acquired during the financial crisis.
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