LOS ANGELES (4/6/12)--Officials of the former Western Corporate FCU have filed amended counterclaims and a demand for a jury trial in the lawsuit filed against them by the National Credit Union Administration (NCUA).
The counterclaims were made Wednesday before the U.S. District Court Central District of California in Los Angeles by two of the officials NCUA had sued--Robert A. Siravo, former president/CEO of WesCorp, and Thomas E. Swedburg, former director of human resources.
Their second amended answer and counterclaims docuoment seeks dismissal of the case, with prejudice, and asks the court to order that NCUA, as liquidating agent for WesCorp, reimburse Siravo and Swedberg for their defense costs, damages, and other court costs. The filed document said they had incurred more than $100,000 in attorney's fees and costs of their defense. Siravo and Swedberg also demanded NCUA indemnify them under Policy 21 adopted by WesCorp to so current and former officials and employees could recover costs and attorney fees in case of a lawsuit.
NCUA sued five WesCorp senior executives to try to recoup $6.8 million in investment portfolio losses from mortgage backed securities, alleging the executives were negligent in monitoring the corporate's investments. NCUA also alleged a breach of fiduciary duty and fraud related to the investments that contributed to WesCorp's collapse.
In earlier decisions last month U.S. District Judge George H. Wu granted NCUA's motion to strike certain defense but allowed the executives to amend their arguments related to their indemnification claim.
The court document filed Wednesday by the WesCorp executives also addressed the issues of decision-making related to investments WesCorp purchased and to WesCorp's Supplemental Executive Retention Plans (SERPs). Siravo received a lump sum SERP payments in 2008 totaling $6.8 million and Swedberg received $1.2 million, the document said.
Siravo and Swedberg argue that they acted in "reasonable good faith reliance on the statements, representations, and approvals of others upon whom they were entitled to rely, including but not limited to the WesCorp Board of Directors, individual directors, other WesCorp officers, the ALCO [WesCorp's Asset and Liability Committee], rating agencies, underwriters, brokers, issuers, auditors, investment bankers, financial advisors, and counsel."