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FDIC Enforcement Decisions and Orders

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   [10,039A] In the Matter of Steven N. Buerge, Docket No. FDIC-89-105e (1-17-90).

   Director and officer removed from office and prohibited from further participation in Bank's affairs, from participation in any capacity in the affairs of any insured institution, and from the exercise of any voting rights in any insured institution.

   [.1] Prohibition, Removal, or Suspension—Prohibition—Participation in Affairs
   [.2] Prohibition, Removal, or Suspension—Prohibition—Service as Director— Any Institution
   [.3] Prohibition, Removal, or Suspension—Prohibition—Participation in Affairs—Any Institution
   [.4] Prohibition, Removal, or Suspension—Prohibition—Exercise of Voting Rights—Any Institution
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In the Matter of
STEVEN N. BUERGEindividually and as
an executive officer and a director of
SECURITY STATE BANK FORT
SCOTT, KANSAS
(Insured State Nonmember Bank)
ORDER OF REMOVAL FROM OFFICE AND PROHIBITION FROM FURTHER PARTICIPATION

   On June 14, 1989, the Federal Deposit Insurance Corporation ("FDIC") issued to Steven N. Buerge ("Respondent") a NOTICE OF INTENTION TO REMOVE FROM OFFICE AND TO PROHIBIT FROM FURTHER PARTICIPATION ("NOTICE"), detailing the unsafe or unsound banking practices, violations of law, rule or regulation, and breaches of fiduciary duty alleged to have been committed by Respondent, individually and in his capacity as director, officer and person participating in the conduct of the affairs of Security State Bank, Fort Scott, Kansas ("Bank"), and further detailing Respondent's right to a hearing on such alleged charges under section 8(e) of the Federal Deposit Insurance Act ("Act"), as amended by sections 901, 903 and 904 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), Pub.L.No. 101-73, §§901, 903 and 904, 103 Stat. 183, _____ (to be codified at 12 U.S.C. §1818(e)).
   Thereafter, Respondent, having waived his right to a hearing, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER OF REMOVAL FROM OFFICE AND PROHIBITION FROM FURTHER PARTICIPATION ("CONSENT AGREEMENT") with a representative of the Legal Division of the FDIC, dated January 4, 1990, whereby solely for the purpose of this proceeding and without admitting or denying the allegations contained in the NOTICE, Respondent consented to the issuance of an ORDER OF REMOVAL FROM OFFICE AND PROHIBITION FROM FURTHER PARTICIPATION ("ORDER") BY THE FDIC.
   The FDIC considered the matter and determined it had reason to believe that:
   (a) Respondent has engaged or participated in unsafe or unsound banking practices, violations of law, rule or regulation, and breaches of his fiduciary duty as a director and officer of the Bank;
   (b) By reason of such practices, violations, and breaches of fiduciary duty, (A) the Bank has suffered substantial financial loss or other damage, (B) the interests of the Bank's depositors were seriously prejudiced, and (C) Respondent received financial gain; and
   (c) Such practices, violations, and breaches of fiduciary duty demonstrate Respondent's willful or continuing disregard for the safety or soundness of the Bank and evidence his personal dishonesty.
   The FDIC further determined that such practices, violations and breaches of fiduciary duty demonstrate Respondent's unfitness to serve as an Institution-Affiliated Party of any insured depository institution, as defined in section 3 of the Act, as amended by section 204(f)(6) of FIRREA, Pub. L. 101-73, §204(f)(6), 103 Stat. ______ (to be codified at 12 U.S.C. §1813(u)), including his unfitness to continue to serve as a director or officer of the Bank. The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

ORDER OF REMOVAL FROM OFFICE AND PROHIBITION FROM FURTHER PARTICIPATION

   [.1] 1. IT IS HEREBY ORDERED that, except with prior written consent obtained in accordance with section 8(e)(7)(B) of the Act, as added by section 904(a) of FIRREA. Pub. L. 101-73, §904(a), 103 Stat. 183, _____ (section 904(a) to be codified at 12 U.S.C. §1818(e)(7)), Respondent is removed from participating in any manner in the conduct of the affairs of the Bank.

   [.2] [.3] 2. IT IS FURTHER ORDERED that, except with prior written consent obtained in accordance with the said section 8(e)(7)(B) of the Act, Respondent shall not continue or commence to hold any office in, or participate in any manner in the conduct of the affairs of, any institution or agency specified in section 8(e)(7)(A) of the Act, as added by section 904(a) of FIRREA, Pub. L. 101-73, §904(a), 103 Stat. 183, ____ (section 904(a) to be codified at 12 U.S.C. §1818(e)(7)), including:
   (a) Any insured depository institution, as defined in section 3(c) of the Act, as amended by section 204(c) of FIRREA, Pub. L. 101-73, §204(c), 103 Stat. 183, _____ (section 204(c) to be codified at 12 U.S.C. §1813(c));
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   (b) Any institution treated as an insured bank under subsections 8(b)(3) or 8(b)(4) of the Act, as amended by section 902(a) of FIRREA, Pub. L. 101-73, § 902(a), 103 Stat. 183, _____ (section 902(a) to be codified in relevant part at 12 U.S.C. §§ 1818(b)(3) and (4)), including, without limitation: (1) any bank holding company, (2) any subsidiary of a bank holding company other than a bank, (3) any foreign bank that maintains a branch or agency in a State, (4) any foreign bank or foreign company controlling a foreign bank that controls a commercial lending company organized under State law, and (5) any company of which any foreign bank or company referred to in (3) and (4), above, is a subsidiary;
   (c) Any institution treated as a savings association under section 8(b)(8) of the Act, as added by section 902(a) of FIRREA, Pub. L. 101-73, § 902(a), 103 Stat. 183, _____ (section 902(a) to be codified in relevant part at 12 U.S.C. § 1818(b)(8)), including, without limitation, any holding company of a savings association, any subsidiary of such a holding company, any service corporation of a savings association, and any subsidiary of such service corporation, whether wholly or partly owned;
   (d) Any insured credit union under the Federal Credit Union Act;
   (e) Any institution chartered under the Farm Credit Act of 1971;
   (f) Any appropriate Federal depository institution regulatory agency;
   (g) The Federal Housing Finance Board and any Federal home loan bank; and
   (h) The Resolution Trust Corporation.

   [.4] 3. IT IS FURTHER ORDERED that, except with prior written consent obtained in accordance with the said section 8(e)(7)(B) of the Act, Respondent shall not:

       (a) Solicit, procure, transfer, attempt to transfer or to vote any proxy, consent, or authorization with respect to any voting rights in any institution specified in the said section 8(e)(7)(A) of the Act;
       (b) Violate any voting agreement previously approved by the appropriate Federal banking agency; or
       (c) Vote for a director of any institution specified in the said section 8(e)(7)(A) of the Act, or serve or act as an Institution-Affiliated Party.
   This ORDER shall become effective thirty (30) days after the date of its issuance.
   The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provision of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Pursuant to delegated authority.
   Date of Issuance: Jan. 17, 1990.
   Charles E. Thacker
   Regional Director
   Federal Deposit Insurance Corporation

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Last Updated 6/6/2003 legal@fdic.gov