The NCUA said it filed suit Thursday against David Addison,former CEO of Texans Credit Union, blaming Addison for the creditunion's financial woes.

The suit filed in U.S. District court in Dallas alleges “Addisonbreached his fiduciary duty to members and was 'grossly negligent'in his management of the credit union, which is now inconservatorship.”

The conservatorship occurred in 2011 after Addison led theacquisition of financial services firm OBS Holdings Inc. and otherinvestments that eventually resulted in $16 million in losses atthe Richardson, Texas, credit union, the NCUA said.

“Addison's gamble with TCU's funds in these high-risk, largelyunstable businesses and investments is what caused TCU's ultimatedownfall,” the NCUA said. Its complaint did not ask for a specificdamage award.

Addison was hired in 2003 and left TCU in January 2009. The complaint also alleged that Addison:

• Pursued acquisitions and investments that “exposed TCU to anextraordinary level of risk,” ultimately costing the credit uniondebilitating losses.
• Knew his actions could significantly injure the credit unionand violated certain credit union laws. He nonetheless pursued thepurchase of OBS,
• Ignored counsel that the OBS acquisition was extremely riskyand was impermissible under Texas law.
• Concealed and misrepresented material information about hisbusiness dealings to TCU's board of directors in order to pushthrough his agenda.

“Mr. Addison's actions were very costly to the credit union, andfinancial institution regulators have a responsibility to holdaccountable those parties—institutions or individuals—when theyundermine safety and soundness,” NCUA Board Chairman Debbie Matzsaid.

TCU's situation has improved operating efficiencies and riskmanagement since the NCUA seizure and it earned more than $21million this year as of Nov. 30, the NCUA said. TCU now has almost130,000 members and approximately $1.4 billion in assets, theagency said.

“NCUA is required by statute to take every action we can torecover TCU's losses, including legal action,” Matz said. “Anyrecoveries in this case will go directly to TCU, assisting inNCUA's rehabilitation efforts at TCU.”