Federal regulators sue JPMorgan, RBS for $840M

WASHINGTON — Federal regulators have sued JPMorgan Chase & Co. and Royal Bank of Scotland PLC in a bid to recover about $840 million in losses on securities tied to high-risk mortgages that were purchased by five wholesale credit unions that failed in the financial crisis.

The National Credit Union Administration, a federal regulatory agency, on Monday accused the two banks' securities divisions of misrepresenting how risky the mortgage securities were.

When the value of the securities plunged, that led five corporate credit unions to fail in 2009 and 2010, according to the lawsuit. The credit unions were seized by the agency, which put them into conservatorship and then liquidated them.

The NCUA said it could sue five to 10 other banks in coming weeks.