LOS ANGELES A federal court today dismissed civil negligence charges against Todd Lane, who had been chief financial officer of WesCorp FCU, as NCUA approved an out-of-court settlement with the last of what was once 16 defendants in the case sprung out of the collapse of the $34 billion corporate credit union.
Lane is the final one of five senior WesCorp executives to settle the NCUA civil charges, along with former CEO Robert Siravo, former Chief Investment Officer Bob Burrell, former Chief Risk Officer Timothy Sidley and former Human Resources Director Thomas Swedberg. The original NCUA suit, filed in November 2009 in state court, then moved to federal court, also named 11 former WesCorp directors, all CEOs of large western credit unions, but the federal court eventually dismissed those charges.
Like most of the other WesCorp executives, Lane, now CFO at California Coast CU, is expected to be barred from working for a corporate credit union. NCUA is expected to issue a prohibition order against Lane in the near future as part of the settlement.
The end of the suit, filed in U.S. District Court for the Central District of California, comes with a whimper, as did a separate civil suit over the collapse of U.S. Central FCU, with neither case going to trial where corporate executives threatened to reveal the true extent of NCUA’s knowledge about the risky investments that sunk the two corporate failures.
NCUA has released only sparse information about the other WesCorp settlements, refusing all requests for details. Other than Siravo, who agreed to pay $600,000 to NCUA, it is unclear if any of the others will pay any monetary penalty. In addition, NCUA failed to obtain any compensation from the bond company in the WesCorp case.
The NCUA suit charged Lane and the other senior Wes Corp executives with negligence in the March 2009 collapse of the corporate credit union giant under the weight of risky bets on residential mortgage-backed securities. NCUA projects the corporate failure will cost $7 billion to resolve, making it the costliest credit union failure ever.
