Friday, May 19, 2023

Why The Leadership Ability And Judgment Of Chairman Chris Ayers And The Entire SECU Board Is Being Questioned

  Will let you read and judge the following email information for yourself. Would say that although I do not know the true identity of the sender of the information, I can verify for you that the source articles and publications are entirely legitimate (you may not be able to read entire article without a subscription. Will try to get full copies and post.).

Would also note that the financial debacle caused by the failure of Wescorp in 2009/2010 (a $6 billion insolvency!) is well known to "legacy" employees at SECU - and to every CU in the U.S. - who had to deal with the economic fallout. In fact, former SECU CEO Mike Lord was the chief financial officer at SECU when the Wescorp collapse occurred.

As I understand it, Mr. Lord was not, shall we say, amused, when current Chairman Chris "Mr. NFPP*" Ayers - with this "strategic move" - led a divided Board to the precipice, and then "bungy jumped" SECU, its staff, and its membership into the abyss...


Better pour yourself a strong one before proceeding... you may not need to hold your breath, but you'll certainly want to hold your nose!


✔ Incoming Email 5/14/2023


Are you familiar with Hayes' past as CFO of WesCorp? And all the shadiness around underreporting of losses, the federal lawsuits, the c-suite corruption, etc? If not, I can expand and provide some news articles and other sources.
✔ Reply Email 5/16/2023
Have limited knowledge of Mr. Hayes, have never met him, have little insight into his personality, capabilities, and detailed work history.

So yes, more precise info would be helpful...always a lot of snarking about any CEO, so facts/references help more than plain old disgruntlement.

Thank you. Sorry for the delay in response.
✔ Incoming Email 5/17/2023
Cool! Apologies if any of this is redundant, obviously I'm not aware of what you do or don't know (vis-a-vis Wescorp), and don't want to leave anything out. I've put links to sources throughout my email. If it's in bold, it's a link. 

First, per Hayes' Linkedin page, he was Chief Financial Officer of WescMr. orp from April 2008 to October 2010. This article corroborates that timeline. 

Western Bridge Corporate Federal Credit Union, aka Wescorp, was a corporate credit union with $23 billion in assets. At the end of March 2009, about a year after Hayes became CFO, NCUA placed Wescorp into conservatorship, removing their board of directors and CEO. Somehow, Hayes survived that purge and remained with WesCorp for another year. It was ultimately dissolved in 2012. I could be wrong but I believe I read somewhere that in terms of assets, it's the largest failure of a credit union in US history.

The credit union was severely mismanaged, and was over-leveraged with poor investments. James (Jim) Hayes was named as one of the defendants in a lawsuit after the credit union's failure. The lawsuit alleged neglience and breach of fiduciary duty (sound familiar?).  The suit specifically addressed their 2008 and 2009 investment losses - when Hayes was CFO. An interesting tidbit from the page I just linked: "defendants failed to recognize economic conditions and take steps to protect assets, instead reassuring members that "finances were sound" and that "WesCorp's 2008 financial performance would be its best year ever." 

Speaking of deception, here's an interesting article.  Your recent blog post about the SECU financial report reminded me of this. Obfuscation and deception is the name of the game with Hayes. 

Here's another article mentioning the lawsuit, which refers to him as Jim Hayes, rather than James (just in case there was any doubt). 

I can't find it now - it may actually be mentioned in one of the links above - but when doing research on this before, I noted a section that said that part of the reason they were being sued was because the c-suite executives had changed employee benefit packages at the credit union to enrich themselves at the expense of the regular employees. Big time levels of corruption at the executive level. 

This is a running theme with Jim Hayes. I leafed through some employee reviews from his time at Andrews Federal, and a lot of the employees expressed a concern of c-suite corruption. (But that's not something that I have evidence for. I haven't researched his time at Andrews that much. Might be worthwhile to explore further?).

The point is, Hayes has already been closely involved in the failure of a large, multi-billion dollar credit union, and if you read through these sources, it all sounds eerily familiar to what is being done at SECU now, as well as what they're planning to do in future (particularly in a world where H410 passes). I do not believe, with Hayes in charge, that SECU is too big to fail. 

 It's possible you, or people you know, are smarter than me and can dig a little deeper into his history to find more juicy information. But clearly something stinks here. 

Lemme know what you think! Is this a big nothingburger? 
Here's the thing I said I couldn't find. I found it. I didn't fully remember the details:

It doesn't directly mention Hayes, but he was CFO at the time of this happening. Is this not something that would have gone across his desk? Maybe not; I don't know how things work at the C-suite level. (That's why I thought it would be worthwhile to reach out to you!)

"The defendants accused of fraud are Robert A. Siravo, who was WesCorp’s chief executive, and Thomas E. Swedberg, who was vice president of human relations. Reached by phone Wednesday, they declined to comment on the case.

The lawsuit says improper changes were made to WesCorp’s retirement plan for executives, causing the credit union to pay Siravo $6.8 million in May 2008 instead of the $4.5 million he would have received under the original terms of the plan.

Swedberg received more than $1.2 million in January 2009 rather than the $535,000 he would have received if the plan had not been changed, the lawsuit alleged." 

... can't wait to hear a little "Fireside Chat spin" from Chairman Ayers and the SECU Board on this one. 

*"NFPP" - the Ayers "no formal proposal proposal" (to merge LGFCU)