WesCorp Defendants Strike Back in NCUA Suit
In a series of dense, closely argued and lengthy documents filed in the court of U.S. District Judge George H. Wu the inside WesCorp officers still at the knife’s edge of NCUA’s litigation over the failure of the big corporate have fought back.
And their counter-claim boils down to: the NCUA well knew what the corporate leaders were doing so they cannot be held responsible.
They also joined in demanding that the NCUA permit insurance policies that had been provided by WesCorp to its officers to pick up legal fees incurred by the defendants. The agency apparently has ordered the insurer to deny the claims.
Defendant Todd Lane, the onetime WesCorp CFO, for instance, argued in his filing that “NCUA’s Office of Corporate Credit Unions (OCCU) provided supervision and oversight of WesCorp, including its investment strategies and risk assessment. This supervision was done, among other ways, through an on-site examiner who was physically located at WesCorp’s facilities on a fulltime basis, examining WesCorp’s activities.”
With a fulltime minder on the WesCorp premises, NCUA was, Lane’s argument continued, at all times fully aware of what WesCorp was investing in. And NCUA “approved” the investments, Lane alleged.
The other named defendants – Robert A. Siravo (WesCorp's former president/CEO), Robert Burrel (former executive vice president), Timothy Sidley (former chief risk officer) and Thomas E. Swedberg (former vice president) – advanced similar arguments in their filings.
New in these filings are claims for reimbursement of legal expenses incurred by the defendants.
Burrell’s filing includes this, for instance: “The NCUA is obligated to advance to Burrell his attorneys’ fees and costs incurred in defense of this litigation. ...The NCUA has failed to respond to Burrell’s request.”
The other defendants have similar pleas in their filings.
Latest word is that cases against the remaining defendants are not expected to proceed to trial until 2013.
NCUA, when asked for comment on the claims and counter-claims of the WesCorp defendants, indicated it had no comment.