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NCUA files amended complaint in WesCorp suit
ALEXANDRIA, Va. (9/1/10)—In its roles as conservator of Western Corporate FCU (“WesCorp”) and plaintiff in a lawsuit against the corporate’s former directors and current and former officers, the National Credit Union Administration (NCUA) Tuesday filed an amended complaint with the U.S. District Court for the Central District of California. The action amends a November 2009 complaint filed by the original plaintiffs--lst Valley CU, Cascade FCU, Glendale Area Schools FCU, Kaiperm Northwest FCU, Northwest Plus CU, Stamford FCU, and Tulare County FCU—which were all members of WesCorp. But like that complaint, the new documents allege various breaches of fiduciary duties of care and gross negligence on the part of fifteen former WesCorp directors and officers in connection with over-concentration of certain types of Option ARM Mortgage Backed Securities. The complaint also alleges breaches of fiduciary duty and fraud on the part of two former WesCorp officers and unjust enrichment on the part of one former officer in connection with irregular payments from WesCorp’s Supplemental Executive Retirement Plans. Credit Union National Association (CUNA) President/CEO Bill Cheney is among the former directors named in the suit. Learning of NCUA’s amended complaint, CUNA Chairman Harriet May strongly disagreed with NCUA’s decision to include Cheney and noted that she and the CUNA board recognized his service to WesCorp ended in February 2006, before most of the securities that caused losses were even purchased and during a time when NCUA had an examiner of its own on-site at WesCorp. “Bill served voluntarily on the corporate board with utmost professionalism, adhered strictly to his fiduciary duties and acted in the best interests of Wescorp’s member credit unions--including his own at the time,” noted May, who is also CEO of GECU in El Paso, Texas. “Bill is a man of the highest integrity who has spent 25 years in the credit union movement--actively seeking and attaining state and national leadership roles--with a singular dedication to its success, and nothing else,” she said.

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