LOS ANGELES — The U.S. regulator of credit unions is suing Goldman Sachs & Co. for more than $491 million in damages over losses incurred by five failed wholesale credit unions that bought mortgage-backed securities from the investment bank.
The National Credit Union Administration filed the lawsuit on Tuesday in U.S. District Court in Los Angeles.
The federal regulatory agency claims Goldman Sachs misrepresented how risky the mortgage-backed securities it sold were.
The agency says that when the value of the securities plunged, that led the credit unions to fail.
Regulators have asserted similar claims in lawsuits against JPMorgan Chase & Co. and Royal Bank of Scotland PLC.
The NCUA says it may sue five to 10 other banks in coming weeks.
Goldman Sachs did not immediately return a call seeking comment.