Directors’ Personal Risk Not Increased, Says Attorney
MAUI, Hawaii — Much noise was made following the NCUA’s issuance of its regulation concerning the responsibilities of federal credit unions’ boards of directors last year. But Brian Witt, partner with Farleigh Wada Witt, despite some insurance providers’ assertions, said “I don’t think your personal risk is greatly increased.”
Witt said the WesCorp suit against the officers and directors provided some insight into the matter. Seven credit unions sued the WesCorp board and officers for negligence and gross negligence, and later the NCUA took over the case, adding fraud to the charges against the corporates’ former executives. He noted that while the case against the officers rages on, the judge dismissed the charges against the directors, finding that they had acted with an acceptable level of business judgment and no breach of fiduciary duty.