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The FDIC has become aware of multiple instances in which individuals or purported investment advisors have approached financially weak institutions in apparent attempts to defraud the institutions by claiming to have access to funds for recapitalization. These parties also may claim that the investors, or individuals associated with the investors, include prominent public figures and that the investors have been approved by one or more of the federal banking agencies to invest substantial capital in the targeted institutions. Ultimately, these parties have required the targeted institutions to pay, in advance, retention and due diligence fees, as well as other costs. Once paid, the parties have failed to conduct substantive due diligence or to actively pursue the proposed investment.
Institutions should be extremely cautious if approached by any party in a similar manner. Before entering into any agreements or paying any funds, targeted institutions should verify the credibility of such solicitations, including the credibility of the investor group, their principals, and their representatives. Further, institutions deemed to be Critically Undercapitalized for purposes of Prompt Corrective Action are cautioned that prior approval may be required for the payment of retention or due diligence fees, or other costs. If, following assessment of the parties and proposal, it appears likely that a proposal is fraudulent, institutions should submit a Suspicious Activity Report in compliance with Part 353 of the FDIC's Rules and Regulations and ensure that the designated FDIC Case Manager is informed of the solicitation and the institution's actions.
For your reference, FDIC Special Alerts may be accessed from the FDIC's Web site at www.fdic.gov/news/news/SpecialAlert/2012/index.html. To learn how to automatically receive FDIC Special Alerts through e-mail, please visit www.fdic.gov/about/subscriptions/index.html.
Distribution: FDIC-Supervised Institutions (Commercial and Savings)
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