Ex-WesCorp CEO Siravo Calls Charges A 'Sideshow'
LOS ANGELES - Former WesCorp CEO Robert Siravo told a federal court here last week he is ready to defend himself against charges of managerial negligence in the failure of the one-time $34-billion corporate, but that additional charges brought by NCUA alleging he plotted to pad his retirement benefits by millions are nothing but a "sideshow" to the main event and should be dismissed.
"This case is about WesCorp's investment decisions, which Mr. Siravo is fully prepared to defend on the merits," lawyers for the ex-WesCorp chief wrote in a motion to dismiss this week. "It has nothing to do with the [retirement plan] amendments, the implications of which were fully disclosed to the Board."
Siravo said there is no evidence to prove that he plotted with the WesCorp director of HR to pump up his retirement benefits so that he was paid $6.9 million as he planned his exit the year before WesCorp was taken over by NCUA. In fact, Siravo's lawyer said the multi-million severance package actually was less than the $7.4 million he would have been entitled to under the corporate's old retirement benefits.
Siravo, who ran WesCorp from 2002 until its demise in 2009 and ultimate conservatorship by NCUA, is front and center of the biggest loss in credit union history, which NCUA expects to reach as much as $7 billion. NCUA has charged Siravo and other top WesCorp officers, as well as 11 members of the board of directors, in a civil suit with breach of fiduciary duties and gross negligence in the huge corporate failure. The regulator also has charged Siravo and the HR director, Thomas Swedberg, with fraud in connection with the amended retirement plans that NCUA alleges increased the payouts for three top executives by more than $2.5 million.
The claims by the former WesCorp CEO come as the former WesCorp directors responded to the NCUA charges by pointing their fingers back at the federal regulator, who, they pointed out, had examiners housed on-site at WesCorp throughout its demise and knew what was going on at all times.
Merger Registry Now Running
ALEXANDRIA, Va.-NCUA merger partner registry is now operational. Created in response to input from the two CU trade groups that CUs interested in being considered for assisted mergers and purchase and assumptions were not being given enough attention, the service seeks to address that shortcoming, according to NCUA.
For info: www.ncua.gov.
Data Shows Better Bottom Lines
WASHINGTON-In its analysis of Q3 data, Callahan & Associates' said its FirstLook program (representing 4,000 CUs and approximately $550 billion in assets), found:
* Loan volume picked up in Q3. Lending was up 15.7% over loan originations for the same group of FirstLook credit unions in Q2, "although year-to-date originations remain lower than 2009, largely because of a record level of originations in the second quarter of 2009," the copany said.
* Asset quality is stable. Delinquencies were up Delinquency is up one basis point from the previous quarter to 1.79%, while the charge-off ratio was down one basis point from June levels to 1.10%, Callahan's said.
* CU bottom lines are improving. CU margins were stable, increasing two BPs to 3.21% and marketing the third straight quarter for First Look CUs in which net interest margin has covered operating expenses. Callahan's noted that the operating expense ratio did increase 10 BPs from June to reach 3.12%; however, the majority of the increase comes from the line item for assessments.
3 Mos., 65,000 Foreclosure Cases
TALLAHASSEE, Fla.-From July 1 through Sept. 30, 2010, Florida courts cleared more than 65,000 foreclosure cases. The Office of the State Courts Administrator in Florida issued a report last week showing that 46,940 foreclosure cases were granted a summary or final judgment in the period from July 1 to September 30. Just 23 cases went to trial during that time. Additionally, 17,025 cases were dismissed for various reasons that could include a short sale or deed-in-lieu of foreclosure. The backlog of foreclosure cases at the end of the period stood at 396,509, down from 462,339.