Investors Pressure Converted CU
CRANFORD, N.J.-Just two years after becoming one of the first converted credit unions to go public, Synergy Financial Corp., a mutual thrift holding company, is being pressured by a group of banking speculators that sees opportunity in the credit union convert.
Financial Edge Fund, a partnership led by P.L. Capital, is waging a proxy fight to win two seats on the former CU's board in hopes of forcing a multi-million dollar stock buyback or something more profitable. The group, which has waged similar proxy contests at Astoria Financial, Central Bancorp and several other small thrifts, said it wants its potential representatives on the board to review ways to lift the stock price and excessive compensation of management and directors, including CEO John Fiore, the first credit union exec to earn $1 million a year after taking his ex-credit union public.
Fiore, who helped convert the credit union, then known as Synergy FCU, to mutual thrift then to publicly held holding company, met with the dissident group last month and rejected their overtures out of hand and refused to nominate the banking speculators to the board. That prompted the proxy battle. P.L. Capital, which has accumulated a Synergy Financial stake of just less than 10%.
CO-OP Sets Another Record
ONTARIO, Calif.-The CO-OP Network reported a record 1,131,087,817 EFT transactions in 2005, setting a new volume standard for the 13th consecutive year. The company reported that since the streak began over a decade ago, transactions have increased 2,308%, as its members grew from 197 CUs to 1,835 members. The CO-OP Network reported that the most significant jump in its 2005 transaction totals was the 20% increase for signature debit and PIN POS. Several other factors contributed to CO-OP Network's 2005 record transaction growth, including the addition of more than 5,000 ATMs and four-million cardholders, it added.
Gang On Trial For 18 Robberies
ST. LOUIS-A gang that tried to rob 18 local credit unions and banks over five years, taking tellers hostage to gain entrance before the institutions opened to gain entrance, terrorized employees during the heists that netted more than $1.4 million, according to federal prosecutors during opening arguments for alleged gangleader Otis McAllister. Six alleged accomplices of McAllister have pleaded guilty and several of them are cooperating with the prosecution.
The gang allegedly robbed nine credit unions and banks in Missouri, Illinois and Ohio, among them were two of the biggest credit union robberies ever; the June 12, 2000 theft of Jennings, Mo., branch of St. Louis Community CU $266,293 and the December 8, 2000 theft of $211,590 from the St. Louis branch of the same credit union. The prosecution's first witness, Kekelia Black, said she met one of the co-defendants, Franklin Morris, while working at St. Louis Community CU for which Morris had provided security guards. Black said that in 1999 she agreed to provide Morris with account information that he used to siphon nearly $100,000 out of member accounts.
In 2000, after leaving the credit union, Morris asked her to meet with another man, identified as McAllister, to discuss the credit union's vulnerabilities to a robbery, such as the fact that a single person opened it in the mornings.
Defense lawyers argued that because the robbers' identities were disguised by masks and even women's clothing, none of the employees or victims can identify McAllister.
Help With Home Heating Costs
BOSTON-City of Boston CU is providing with a special loan deal to help finance the rising costs of home heating this winter. Members can borrow up to $1,500 until April 30 and the CU will deposit the loan proceeds into a special share account earning 5.99% APY, which they can draw down to pay heating costs. The loan must be repaid within a year. Members will need to provide a heating bill when applying.
