Members of failed CBS Employees Federal Credit Union (Studio City, CA) have filed a class action lawsuit against the Board of Directors and Supervisory Committee of the credit union.
The complaint alleged the Board of Directors and Supervisory Committee failed to exercise reasonable oversight of CEO Rostohar, who pleaded guilty to embezzling at least $40 million from the credit union.
The complaint stated that the negligence of the board deprived the members of the anticipated benefits of lower loan rates and higher savings rates.
CBS Employees FCU was liquidated on March 29, 2019.
University Credit Union (Los Angeles, CA), which assumed the shares and loans of the failed credit union, was also named as a defendant.
The plaintiffs are seeking compensatory and consequential damages of at least $40 million and any excess amount to be proven at trial.
Read the complaint.
Interesting. I don't remember hearing about a suit like this before, have there been previous suits?
ReplyDeleteI have not seen this before. But it may provide a wake up call to CU boards and supervisory committees,
DeleteAbsolutely. Many of these volunteers do not take their positions seriously and act as a rubber stamp to the CEO's wishes
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