NCUA Amends WesCorp Complaint to Include Fraud
The NCUA Board, serving as conservator plaintiffs in the Western Corporate FCU lawsuit, filed an amended complaint today in U.S. District Court that alleges more serious charges than those originally filed.
The suit still includes original charges of breach of fiduciary duties and negligence allegedly committed by former executives Robert Siravo, Robert Burrell and Timothy Sidley, and former directors Robert H. Harvey, Jr., James Jordan, Timothy Kramer, Robin Lentz, John Merlo, Gordon Dames, William Cheney, Warren Nakamura, Brian Osberg, David Rhamy and Sharon Updike. Former Chief Financial Officer Todd Lane, not originally served, joined the defendants list.
Defendants allegedly failed to impose prudent concentration limits on private-label, mortgage-backed securities, particularly option ARMs. The NCUA seeks damages from the above defendants in excess of $1 billion.
New charges were filed against Siravo, Lane and a new defendant, former Vice President Thomas E. Swedberg, concerning amendments they made to their Supplemental Executive Retirement Plans. The NCUA accuses Siravo and Swedberg of fraud and breach of fiduciary duty for damages of $3 million. The regulator seeks an additional $1.4 million in damages from Siravo for breach of fiduciary duty and Lane for unjust enrichment in connection with his unauthorized SERP payout.
Siravo and Swedberg stand accused of defrauding WesCorp's board into authorizing payment amendments for them, and making unauthorized changes to Lane's payout. The suit also alleges that as CFO, Lane should have known better.