The National Association of Credit Unions filed a lawsuit in the Federal District Court in Kansas against Morgan Stanley & Co. (MS), Inc. and other firms, NCUA said in a press release.
The lawsuit charged the companies for selling more than $566 million in faulty mortgage-backed securities to now-defunct U.S. Central and WesCorp corporate federal credit unions.
“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 credit unions are still paying the tab,” said NCUA Board Chairman Debbie Matz.
“All the credit unions we supervise and insure are sharing this burden. The people who are accountable, those who precipitated this crisis, should be required to shoulder that burden, as well,” she added.