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FDIC Enforcement Decisions and Orders

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{{6-30-91 p.C-990}}
   [10,224] In the Matter of Kenneth R. Cary, Docket No. FDIC-90-186e (4-23-91).

   Former officer/director prohibited from further participation in conduct of affairs of, or exercising voting rights in, Bank or any insured institution without prior consent of FDIC.
{{4-30-94 p.C-991}}

   [.1] Prohibition—Participation in Conduct of Affairs
   [.2] Prohibition—Exercise of Voting Rights

In the Matter of
KENNETH R. CARY, individually,
as an officer, director, and/or
person participating in the
conduct of the affairs of
LINDALE STATE BANK
LINDALE, TEXAS
(Insured State Nonmember Bank)
ORDER OF PROHIBITION FROM
FURTHER PARTICIPATION

   Kenneth R. Cary ("Respondent"), having been served with a NOTICE OF INTENTION TO PROHIBIT FROM FURTHER PARTICIPATION ("NOTICE") issued by the Federal Deposit Insurance Corporation ("FDIC") detailing unsafe or unsound banking practices and/or breaches of fiduciary duty by reason of which Lindale State Bank, Lindale, Texas ("Bank") has suffered or will probably suffer financial loss or other damage, and/or that the interests of depositors have been or could be prejudiced and/or that respondent has received financial gain or other benefit; and which demonstrate that such practices or breaches evidence Respondent's personal dishonesty and/or willful and/or continuing disregard for the safety and soundness of the Bank. Having been advised of his right to a hearing on the charges alleged in the NOTICE under section 8(e) of The Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(e), and Part 308 of the FDIC's Rules of Practice and Procedures, 12 C.F.R. Part 308, and having waived those rights, Respondent entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER OF PROHIBITION FROM FURTHER PARTICIPATION ("CONSENT AGREEMENT") with a representative of the Legal Division of the FDIC, dated January 8, 1991, whereby solely for the purpose of this proceeding and without admitting or denying any unsafe or unsound banking practices or any breaches of fiduciary duty, Respondent consented to the issuance of an ORDER OF PROHIBITION FROM FURTHER PARTICIPATION ("ORDER") by the FDIC.
   The FDIC considered the matter and determined it had reason to believe that:

       (i) Respondent has engaged or participated in unsafe or unsound banking practices and/or breaches of his fiduciary duty as an institution-affiliated party of the Bank;
       (ii) By reason of such practices and/or breaches of fiduciary duty, the Bank has suffered or will probably suffer financial loss or other damage, the interests of the Bank's depositors have been or could be prejudiced and/or Respondent received financial gain; and
       (iii) Such practices and/or breaches of fiduciary duty involve personal dishonesty on the part of Respondent or demonstrate Respondent's willful and/or continuing disregard for the safety or soundness of the Bank.
   The FDIC further determined that such practices and/or breaches of fiduciary duty demonstrate Respondent's unfitness to serve as a director, officer, person participating in the conduct of the affairs or as an institution-affiliated party of the Bank, or any other insured depository institution, any institution treated as an insured bank or as a savings association, any Federally insured credit union, any farm credit bank, any appropriate Federal depository institution regulatory agency, the Federal Housing Finance Board and any Federal Home Loan Bank or the Resolution Trust Corporation. The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following.

ORDER OF PROHIBITION FROM
FURTHER PARTICIPATION

   [.1] 1. Kenneth R. Cary is hereby prohibited, without the prior written approval of the FDIC and the appropriate Federal financial institutions regulatory agency as that term is defined in section 8(e)(7)(D) of the Act, 12 U.S.C. § 1818(e)(7)(D), from serving or acting as a director, officer, or employee of, or participating in any manner in the conduct of the affairs or serving as an institution-affiliated party of the Bank, or any insured bank or savings association, any Federally insured credit union, any farm credit bank, and appropriate Federal depository institution regulatory agency, the Federal Housing Finance Board and any Federal Home Loan Bank or the Resolution Trust Corporation.

   [.2] 2. Kenneth R. Cary is hereby pro- {{4-30-94 p.C-992}}hibited from voting for a director, or soliciting, procuring, transferring, attempting to transfer, voting or attempting to vote any proxy, consent, or authorization with respect to the voting rights in the Bank, or any other institution listed in paragraph 1 of this ORDER, without the prior written approval of the FDIC and the appropriate Federal financial institutions regulatory agency as that term is defined in section 8(e)(7)(D) of the Act, 12 U.S.C. § 1818(e)(7)(D).
   3. Kenneth R. Cary is hereby prohibited from violating any voting agreement previously approved by the appropriate Federal financial institutions regulatory agency with regard to any institution listed in paragraph 1 of this ORDER, without the prior written approval of the FDIC and the appropriate Federal financial institutions regulatory agency as that term is defined in section 8(e)(7)(D) of the Act, 12 U.S.C. § 1818(e)(7)(D).
   This ORDER shall become effective upon its service on Respondent by the FDIC.
   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.
   Dated this 23rd day of April, 1991.

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