Washington: Federal regulators have sued JPMorgan Chase & Co. over the sale of mortgage securities that contributed to the collapse of three credit unions.
The National Credit Union Administration’s lawsuit alleges that Washington Mutual Bank gave a false picture of $2.2 billion in risky mortgage securities it sold to the three wholesale credit unions. JPMorgan acquired the failed Washington Mutual in 2008.
The agency says in the lawsuit filed Friday in federal court in Kansas that Washington Mutual misrepresented how risky the securities were and omitted key facts in sales documents.
It was the agency’s third lawsuit against JPMorgan over losses from mortgage securities. It has also sued other major banks including Barclays, Goldman Sachs and Credit Suisse.
JPMorgan spokesman Joseph Evangelisti declined comment.