Western Corporate FCU's decision to reclassify part of its investment portfolio to available-for-sale could add some fuel to the PIMCO conflict-of-interest fire, which asserts the bond management firm or others will profit from the purchase of corporate investments.
The NCUA has said it intends to hold corporate securities to maturity, and WesCorp referenced FASB's SFAS No. 115 to support its decision.
"The March 20, 2009 conservatorship of WesCorp represented a significant change in circumstances that was isolated, nonrecurring and unusual that could not have been reasonably anticipated when the securities were initially classified as held-to-maturity," said WesCorp's March 2009 financial summary.
The accounting change will be made effective December 21, 2008, because WesCorp had not yet issued 2008 financial statements at the date of the conservatorship, the $20 billion corporate said.
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