ALEXANDRIA, Va.–NCUA has filed suit in Federal District Court in Dallas against David Addison, the former CEO of Texans Credit Union, alleging Addison breached his fiduciary duty to members and was "grossly negligent" in his management of the credit union, which is now in conservatorship.
In its suit NCUA is alleging that Addison, hired as the credit union's CEO in 2003, "pursued a high-risk business and investment strategy that included acquiring the financial services firm OBS Holdings, Inc. (OBS)," the agency said in the statement, adding that "Addison's gamble with TCU's funds in these high-risk, largely unstable businesses and investments is what caused TCU's ultimate downfall."
While the suit does not set a specific damage award, the OBS purchase eventually cost TCU approximately $16-million in losses.
The $1.4-billion TCU, based in Richardson, Texas, was placed into conservatorship in 2011. It reported net income of $21 million as of Nov. 30.