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FDIC Enforcement Decisions and Orders

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   [10,332] In the Matter of Robert J. Riley, The First State Bank of Lansing, Lansing, Kansas, Docket No. FDIC-91-255e (9-13-91).

   Respondent prohibited from participating in the conduct of affairs of, or exercising voting rights in, any insured institution without the prior consent of the FDIC.

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

In the Matter of
ROBERT J. RILEY,
Individually and as an
Institution-Affiliated
Party of
THE FIRST STATE BANK OF
LANSING

LANSING, KANSAS
(Insured State Nonmember Bank)
ORDER OF PROHIBITION
FROM FURTHER PARTICIPATION

   Robert J. Riley ("Respondent"), having been advised of his right to a NOTICE OF INTENTION TO PROHIBIT FROM FURTHER PARTICIPATION ("NOTICE") issued by the Federal Deposit Insurance Corporation ("FDIC") detailing the unsafe or unsound banking practices, violations of law, rule, or regulation, and/or breaches of fiduciary duty alleged to have been committed by Respondent individually and as an institution-affiliated party in his capacity as director, officer, and person participating in the conduct of the affairs of The First State Bank of Lansing, Lansing, Kansas ("Insured Institution"), which have resulted in substantial financial loss or other damage to the Insured Institution, serious prejudice to the interests of the Insured Institution's depositors, and/or financial gain to the Respondent, and which involved personal dishonesty on the part of Respondent and/or demonstrated a willful or continuing disregard for the safety or soundness of the Insured Institution; and having been further advised of his right to a hearing on the alleged charges 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 and Practice and Procedures, 12 C.F.R. Part 308, waived those rights and 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 June 14, 1991, whereby solely for the purpose of this proceeding and without admitting or denying any unsafe or unsound banking practices, violations of law, rule, or regulation, or 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:
   (a) Respondent has engaged or participated in unsafe or unsound banking practices, violations of law, rule, or regulation, and/or breaches of his fiduciary duty as director and officer of the Insured Institution;
   (b) by reason of such practices, violations, and/or breaches of fiduciary duty, (i) the Insured Institution has suffered or will probably suffer substantial financial loss or other damage, (ii) the interests of the Insured Institution's depositors have been or could be seriously prejudiced, and/or (iii) Respondent has received financial gain; and
   (c) such practices, violations, and/or breaches of fiduciary duty demonstrate Respondent's willful or continuing disregard for the safety or soundness of the Insured Institution and/or involve 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(u) of the Act, 12 U.S.C. § 1813(u). The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

ORDER OF 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, 12 U.S.C. § 1818(e)(7)(B). Respondent is prohibited from participating in any manner in the conduct of the affairs of the Insured Institution.
   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 described in section 8(e)(7)(A) of the Act, 12 U.S.C. § 1818(e)(7)(A), including:

       (a) any insured depository institution, as defined in section 3(c) of the Act, 12 U.S.C. § 1813(c);
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       (b) any institution treated as an insured bank under sections 8(b)(3) or 8(b)(4) of the Act, 12 U.S.C. §§ 1818(b)(3) and (4), including, without limitation: (i) any bank holding company; (ii) any subsidiary of a bank holding company other than a bank; (iii) any foreign bank that maintains a branch of agency in a state; (iv) any foreign bank or foreign company controlling a foreign bank that controls a commercial lending company organized under state law; and (v) any company of which any foreign bank or company referred to in items (iii) and (iv) of this paragraph 2(b), is a subsidiary;
       (c) any institution treated as a savings association under section 8(b)(8) of the Act, 12 U.S.C. § 1818(b)(8), including, without limitation: (i) any holding company of a savings association; (ii) any subsidiary of such a holding company; (iii) any service corporation of a savings association; and (iv) 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.

   [.2] 3. IT IS FURTHER ORDERED that, except with prior written consent obtained in accordance with section 8(e)(7)(B) of the Act, Respondent shall not:
       (a) solicit, procure, transfer, attempt to transfer, vote, or attempt to vote any proxy, consent, or authorization with respect to any voting rights in any institution described in 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 described in section 8(e)(7)(A) of the Act, or serve or act as an institution-affiliated party.
   This ORDER shall become effective 10 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.
   Dated at Washington, D.C., this 13th day of September, 1991.
   Pursuant to delegated authority.

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