WICHITA, Kan. A federal judge has set a hearing for April 29, when he will consider whether to delay as many as eight of NCUA’s suits claiming recompense from Wall Street banks over the corporate credit union debacle and whether the cases should be consolidated.
U.S. Judge John Lungstrum will consider whether to issue a stay in the proceedings while an appeals court reviews whether NCUA waited too long to file the suits. The U.S. Court of Appeals for the Tenth Circuit is reviewing the lower court’s ruling in NCUA’s suit against RBS Securities and Wachovia Capital (now a unit of Wells Fargo), but the ruling will affect the outcome of similar NCUA suits against JP Morgan Chase, UBS Securities, Credit Suisse Securities, Barclay’s Capital and several others.
The suits are critical to NCUA’s corporate stabilization program as the regulator seeks to recover billions of dollars from the Wall Street banks that sold faulty mortgage-backed securities to the five failed corporates, U.S. Central FCU, WesCorp FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU.
At next week’s hearing Judge Lungstrum will consider whether these cases should be consolidated; whether these cases should be stayed in any manner pending the Tenth Circuit’s ruling; and ways in which the appeals court case may be factually or legally distinguishable. All of the parties in the case have been allowed to file four-page briefs to support their positions.