WICHITA, Kan. One of two federal judges scheduled to hear NCUA’s numerous suits against Wall Street banks over the corporate credit union failures has disqualified himself because of a potential conflict of interest in the cases.
The self-disqualification comes as all of the cases filed in Kansas because they involve Lenexa, Kan.-based U.S. Central FCU were reassigned to the same two judges, John Lungstrum and James O’Hara. But O’Hara disqualified himself because one of the dozens of defendants in the cases, Residential Funding Mortgage Securities, is represented by a law firm that employs the judge’s daughter. Even though the daughter is not working on the case, Judge O’Hara decided to disqualify himself because of federal rules requiring disqualification when a judge’s impartiality could be reasonably questioned.
The disqualification comes as the court has scheduled a joint hearing for April 29 on the NCUA suits against RBS Securities, JP Morgan Chase, UBS Securities, Barclay’s Capital, Credit Suisse Securities, Wachovia Securities (now a unit of Wells Fargo) and Bear Stearns and Washington Mutual (now both JP Morgan subsidiaries). Progress on all of the cases are expected to wait until after a federal appeals court rules on whether NCUA waited too long to file its claims, in violation of the statute of limitations.
