Former WesCorp CFO Mounts Vigorous Defense in NCUA Suit
Former WesCorp Chief Financial Officer Todd Lane, in a point by point rebuttal submitted to presiding Judge George H. Wu as part of the ongoing litigation that pits NCUA against the former officers of WesCorp, has taken on every charge leveled against him by the NCUA.
And, in the bargain, Lane has renewed his call for the NCUA to permit payment of his legal fees, now in excess of $100,000, according to the Oct. 31 filing.
The trigger for the litigation is the collapse of WesCorp, an event alleged by the NCUA to be due to the misconduct of its onetime senior executives, Lane included.
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At the heart of Lane’s denial of the NCUA charges against him appears to be a three-fold argument. At all times WesCorp bought highly rated, AA and AAA, instruments sold by reputable financial services firms; the investments were overseen and approved by WesCorp’s board; and, third, “the NCUA’s claims are barred, in whole or in part, by the NCUA’s knowledge, acquiescence, ratification, approval, participation in and/or oversight of WesCorp and WesCorp’s investment strategies, risk-assessment efforts, purchases of MBS securities and other activities.”
That is to say, whatever WesCorp did, NCUA had full knowledge in advance because of its oversight, Lane’s filing claims.
Lane also invoked the so-called business judgment rule. “Every act or omission challenged by the NCUA was made after reasonable investigation and in good faith. Lane had reasonable grounds to believe that such acts or omissions were reasonable and prudent under the circumstances, meeting or exceeding the custom and practice in the industry, and undertaken in what Lane honestly believed to be the best interest of WesCorp.” That is, Lane claims to have exercised sufficient business judgment to assert that his decisions were made in good faith and thus cannot be successfully legally challenged.
As regards legal fees, Lane claims the “NCUA as liquidator of WesCorp is liable for WesCorp’s obligation to pay Lane’s defense costs incurred in this litigation.... Lane has incurred damages as a result of the NCUA’s failure to pay his defense costs incurred in this litigation and will continue to incur damages as a result of the NCUA’s continuing refusal to pay his defense costs, in an amount to be proven at trial, and in excess of $100,000.”
Asked for comments, both Lane and his lead attorney emailed that they were not available. The NCUA declined to comment.