Credit Union Flays Barclays, State Street On $400M CDO

Law360, New York (April 27, 2011, 7:12 PM EDT) -- A Florida credit union unleashed a lawsuit Tuesday in New York alleging Barclays Bank PLC and State Street Corp. peddled a collateralized debt obligation that was designed to fail, costing investors roughly $400 million.

Space Coast Credit Union claims Barclays Capital created the Markov I CDO in order to bet against the junk securities concealed in its portfolio while selling the toxic notes to investors on the professed strength of the collateral.

“This action concerns a large international bank swindling a Florida credit union by creating...
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