BIRMINGHAM, Ala. – NCUA has agreed to release some 750,000 documents related to the failure of U.S. Central FCU in response to a suit brought by Corporate America CU.
“I am satisfied that we are beginning to get access to the documents, but I still remain perplexed as to why NCUA did not produce the documents five months ago when we initially asked for them,” Thomas Bonds, president of the $3.5 billion corporate, told the Credit Union Journal yesterday.
The Alabama corporate is suing over U.S. Central’s ill-fated conversion of capital in the fall of 2008 which erased $450 million of capital owned by U.S. Central’s 27 corporate members within weeks. Corporate America asserts that executives and directors at U.S. Central knew at the time of the conversion that the capital was to be consumed in short order by growing losses by the one-time $52 billion corporate.
The original suit names top U.S. Central executives, including CEO Francis Lee and CFO Kathy Brick, as well as its nine directors, as defendants.
Bonds indicated that he believes the scope of the alleged securities fraud involvement could grow bigger. “Existing defendants may not be all of the ultimate defendants,” stated Bonds. “We simply do not know.”
NCUA declined to comment.
