NEW YORK (TheStreet) -- Wells Fargo (WFC) shares closed trading up 0.91% to $55.47 in intraday trading today, the same day the bank was sued by the U.S. credit union regulator for allegedly failing to fulfill its duties as a trustee for certain residential mortgage-backed securities trusts purchased by five credit unions that ended up going bust.
The National Credit Union Administration (NCUA) filed the suit today, seeking a jury trial for damages related to five credit unions who bought $2.5 billion in residential mortgage-back securities from 2004 to 2007. The securities soured as borrowers began to default on their loans in the midst of 2009's mortgage crisis and the suit alleges that Wells Fargo failed in its position as a trustee for those securities.
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The five credit unions ended up going under as a result of the crumbling foundation of the mortgage-backed securities and the lawsuit alleges that Wells Fargo failed in its obligation to correct problems with the loans and act in the best interest of the credit unions.
"We strongly disagree that Wells Fargo is in any way responsible for any losses incurred on these transactions," said a bank spokesperson of the claim.
TheStreet Ratings team rates WELLS FARGO & CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation: