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[ypsiCPA]

Fifty CUs, Others Sue MetaBank Over $4 Million CD Loss
7/13/2009

By Michelle Samaad

Nearly 50 credit unions, municipalities and pension funds have filed suit against Iowa-based MetaBank to recover $4 million in allegedly stolen certificate of deposit funds.

According to the July 1, 2008 complaint filed by the $40 million Guardian Angel Credit Union, it deposited $99,000 with MetaBank in April 2005. The CU renewed the CD in April 2006 and April 2007. On Jan. 25, 2008, MetaBank sent a letter to Guardian Angel stating that it had recently become aware of unauthorized CDs issued under its logo and brand name. Prior to the CU, two Texas banks and a hospital also sought recovery. Charlene M. Pickhinke, a former MetaBank employee, had allegedly stolen the CD money. According to a South Dakota district court, Pickhinke pled guilty on July 9 to theft.

In its May 14, 2008 SEC 10-Q filings, MetaBank acknowledged that “all evidence currently available indicates that the former employee ran this fraud for her own benefit and regularly took money from the MetaBank accounts to which the purchase monies had been wired.”

Guardian Angel is waiting on a judge to decide if it can move forward with a class action lawsuit, said Christopher Meier, an attorney with Cooper Cargill Chant, who is representing the New Hampshire-based CU.

“It’s surprising to us that MetaBank has not stepped up to make their depositors whole,” Meier told Credit Union Times, adding that the parties involved are also seeking interest and collection fees.

MetaBank spokeswoman Lisa Binder said it could not comment on litigation beyond its public documents. In its May 14, 2009 SEC filing, the bank said, “There are unresolved questions as whether, under what theory and to what degree the bank might be liable for the former employee’s actions.”

http://www.cutimes.com/News/2009/7/Pages/Fifty-CUs-Others-Sue-MetaBank-Over-4-Million-CD-Loss.aspx

Bold text mine; this is a bank (and stock) to stay away from. Ticker symbol CASH