Legal action: Morgan Stanley sued for misdeclaration
A US credit union regulator filed a suit for misrepresenting $566 million in residential mortgage-backed securities.
NEW YORK:
A US credit union regulator has filed suit against Morgan Stanley for misrepresenting a quality of $566 million in residential mortgage-backed securities sold to two now-defunct credit unions. The National Credit Union Administration (NCUA) accused Morgan Stanley and its affiliates of misleading the US Central Federal Credit Union and Western Corporate Federal Credit Union (WesCorp) about the risks of subprime mortgage securities it sold between 2004-2007. NCUA Board Chairman Debbie Matz said firms like Morgan Stanley sold securities that turned out to be faulty, triggering a crisis in the credit union industry that has been extremely expensive to contain and repair, and all the credit unions they supervise and insure share this burden. He added that the people who are accountable, those who precipitated this crisis, should be required to shoulder that burden as well.
Published in The Express Tribune, September 1st, 2013.
A US credit union regulator has filed suit against Morgan Stanley for misrepresenting a quality of $566 million in residential mortgage-backed securities sold to two now-defunct credit unions. The National Credit Union Administration (NCUA) accused Morgan Stanley and its affiliates of misleading the US Central Federal Credit Union and Western Corporate Federal Credit Union (WesCorp) about the risks of subprime mortgage securities it sold between 2004-2007. NCUA Board Chairman Debbie Matz said firms like Morgan Stanley sold securities that turned out to be faulty, triggering a crisis in the credit union industry that has been extremely expensive to contain and repair, and all the credit unions they supervise and insure share this burden. He added that the people who are accountable, those who precipitated this crisis, should be required to shoulder that burden as well.
Published in The Express Tribune, September 1st, 2013.