Lawyers for the NCUA and former WesCorp CEO Robert A. Siravo are due in court Tuesday for a hearing regarding a motion by the regulator to prevent Siravo's attorneys from collecting depositions from current and former NCUA officials Debbie Matz, Gigi Hyland and Kent Buckham.
According to documents filed in U.S. District Court in Los Angeles on July 10, the NCUA is seeking a protective order against the depositions of NCUA Board Chairman Matz, former Board Member Hyland and Director of the Office of Consumer Protection Kent Buckham.
Buckham was director of the NCUA's Office of Corporate Credit Unions at the time of WesCorp's failure.
The NCUA argues in the documents that Siravo's attorneys have not shown that the three have direct personal factual information pertaining to the case that the defendant couldn't get through another source.
The plaintiff cited precedent that high-ranking government officials should not be subject to involuntary depositions unless there are extraordinary circumstances. Matz, Hyland and Buckham are considered high-ranking officials, the NCUA's attorneys added.
For his part, Siravo's attorneys argue that the NCUA's precedent cases involve plaintiffs that sue government officials, whereas “the agency has dragged Mr. Siravo into court.” Siravo's legal team further argues that the three do, indeed, have personal knowledge of important and relevant issues in the case.
Court documents allege Matz said in 2010 that problems with residential mortgage-backed securities lie outside of corporates, and the investments were perceived by the NCUA to be safe before the 2008 economic meltdown. Hyland is also quoted as saying in 2008 that corporates and their investments were doing “just fine.”
Despite the fact that Hyland left the NCUA Board Oct. 5, the regulator argued that her resignation doesn't affect the protective order motion.
“These statements are admissions of party opponents, and cut at the heart of the NCUA's theory that somehow Mr. Siravo should have figured out the problems with RMBS faster than anyone else, even the governing agency that was responsible for overseeing the industry,” argued the defendant's attorneys on July 10.
Siravo's attorneys also go after Buckham's deposition, who they say had direct responsibility for oversight of corporates and was personally involved in reviewing WesCorp's risk management in 2007.
Only Siravo and former WesCorp Chief Financial Officer Todd Lane remain after the NCUA settled with former WesCorp executives Timothy Sidley, Robert Burrell and Thomas Swedberg in March, May and July, respectively.
Should Siravo or Lane fail to reach a settlement with the NCUA, the case would go to trial March 26, 2013. WesCorp was seized by the NCUA March 20, 2009, after investment losses from high concentrations of private-label, mortgage-backed securities eliminated the corporate's capital and racked up the majority of corporate stabilization costs.
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