LOS ANGELES, Calif. (8/22/12)--Court hearings and the trial date have been postponed while settlement talks continue amongst the parties in the National Credit Union Administration's (NCUA's) lawsuit against former Western Corporate FCU senior executives over losses from mortgage-backed securities that led to the corporate's collapse.
The U.S. District Court for the Central District of California had issued a recent order postponing the case while the remaining parties continue negotiations. A hearing that had been scheduled for Tuesday has been reset for Sept. 25 at 1:30 p.m., according to court documents.
NCUA, as liquidating agent for WesCorp, had filed a negligence lawsuit against former WesCorp senior executives. Three have entered settlement agreements with NCUA, while two others have not settled.
The NCUA's suit alleges that officials were negligent in monitoring mortgage-backed security investments that were made by the corporate, and that there was a breach of fiduciary duty and fraud related to these investments, which resulted in $6.8 billion in portfolio losses. The WesCorp employees filed counterclaims and affirmative defenses against NCUA, alleging the agency was aware of WesCorp's investment strategies and approved of and encouraged the strategies.