UBS has been sued by the US National Credit Union Administration over allegations that the Swiss bank misled two credit unions, which later failed, in their purchase of $1.1bn of mortgage bonds, adding to Wall Street’s growing tally of mortgage-related lawsuits brought by US government agencies.

The NCUA accused UBS of violating federal and state securities laws by misrepresenting the quality of the loans underlying the mortgage-backed securities that were sold to US Central Federal Credit Union and Western Corporate Federal Credit Union, two large lenders that were subsequently taken over by the regulator.

The lawsuit adds to the Swiss bank’s legal woes, which already include numerous government inquiries related to mortgage-linked investments as well as investigations linked to the alleged manipulation of international lending gauges known as interbank offered rates, the most popular of which is determined in London.

A UBS spokeswoman declined to comment.

“The strength of our entire financial system relies on trust and accountability,” said Debbie Matz, NCUA chairman. “UBS Securities violated this trust, which contributed to the collapse of two corporate credit unions and the resulting crisis in the credit union industry.”

“We intend to hold UBS Securities, as well as other responsible parties, accountable,” she said.

The credit union regulator has been among the most aggressive of US regulators in seeking damages from large banks related to soured mortgage bonds. The NCUA has sued JPMorgan Chase, Royal Bank of Scotland, Goldman Sachs, Citigroup, Deutsche Bank, HSBC and Wells Fargo.

It has secured more than $170m through settlements with Citi, Deutsche and HSBC.

The NCUA’s lawsuits stem from its takeover of large credit unions that ultimately failed. These lenders, which had purchased mortgage bonds in their search for yield, were crucial to the overall industry, as they served smaller lenders by providing basic services such as cheque clearing.

The cost associated with their failures has since been passed on to surviving credit unions in the form of annual assessments. The NCUA is seeking to recoup some of those costs through litigation over bad mortgage bonds.

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