LOS ANGELES – NCUA agreed yesterday to settle civil negligence charges against a second WesCorp FCU executive for the 2009 failure of the one-time $32 billion corporate credit union, Robert Burrell, who was WesCorp’s chief investment officer.
As part of the settlement Burrell is expected to consent to a prohibition order barring him from working for any federally insured credit union.
Burrell’s deal follows last week’s settlement with Timothy Sidley, who was WesCorp’s chief risk officer, and leaves three defendants in the case brought by the federal credit union regulator: Robert Siravo, who was chief executive officer, Todd Lane, chief financial officer, and Thomas Swedberg, human resources director.
NCUA stands to gain little in the way of financial compensation in any of the cases because it allowed the insurance to lapse after taking WesCorp under conservatorship in March 2009. The question of whether NCUA is responsible for the defendants’ legal fees under a prior directors’ and officers’ liability policy with CUNA Mutual Group’s CUMIS Insurance Society is still being litigated.
NCUA’s attorney in the case Jeff Wexler told Judge George Wu during a hearing yesterday the agency is continuing to negotiate a settlement with Siravo and Swedberg.
Lane’s attorney said this afternoon he is no longer negotiating a settlement and expects his client to be vindicated with a summary judgment in his favor. “I think Todd Lane will get summary judgment,” Kenneth Fitzgerald, a Los Angeles lawyer representing the WesCorp figure, told the Credit Union Journal today. “Judge Wu expressed doubt of the merits of the charges against Lane.”
NCUA filed a civil suit in U.S. District Court for the Central District of California in March 2010 alleging gross negligence on the part of the officers and directors of WesCorp for loading the corporate credit union up with risky residential mortgage backed-securities, which eventually caused its demise. The court dismissed the charges against the directors last year.
