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[¶11,748] In the Matter of John J. Schmalzer, BestBank, Boulder, Colorado, Docket
No. 00-007e (12-21-00)
Respondent prohibited from participating in the conduct of affairs of,
or exercising voting rights in, any insured institution without the
prior written approval of the FDIC.
[.1] Prohibition, Removal or SuspensionProhibition FromParticipation in
Conduct of Affairs
[.2] Prohibition, Removal or SuspensionProhibition FromVoting Rights,
Exercise of
In the Matter of
JOHN J. SCHMALZER,
individually, and as institution-affiliated party of
BESTBANK
BOULDER, COLORADO
(Insured State Nonmember Bank In Receivership)
ORDER OF PROHIBITION FROM FURTHER PARTICIPATION
FDIC-00-007E
John J. Schmalzer ("Respondent") has been advised of
the right to receive a NOTICE OF INTENTION TO PROHIBIT FROM FURTHER
PARTICIPATION ("NOTICE") issued by the Federal Deposit Insurance
Corporation ("FDIC") detailing the unsafe or unsound practices
and/or breaches of fiduciary duty for which an ORDER OF PROHIBITION
FROM FURTHER PARTICIPATION ("ORDER") may issue, and has been
further advised of the right to a hearing on the alleged charges under
section 8(e) of the Federal Deposit Insurance
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Act ("Act"), 12
U.S.C. §1818(e), and the FDIC's Rules of Practice and Procedure, 12
C.F.R. Part 308. Having waived those rights, the 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, whereby solely
for the purpose of this proceeding and without admitting or denying any
unsafe or unsound practices and/or any breaches of fiduciary duty,
Respondent consented to the issuance of an ORDER by the FDIC.
The FDIC considered the matter and determined it had reason to believe
that:
(a) The Respondent engaged or participated in unsafe or unsound
practices and/or breaches of fiduciary duty as an
institution-affiliated party of BestBank, Boulder, Colorado;
(b) By reason of such unsafe or unsound practices and/or breaches of
fiduciary duty, the Bank suffered financial loss or other damage, the
interests of the Bank's depositors have been prejudiced and/or
Respondent received financial gain or other benefit; and
(c) Such unsafe or unsound practices and/or breaches of fiduciary duty
demonstrated the Respondent's willful and/or continuing disregard for
the safety or soundness of the Bank.
The FDIC further determined that such unsafe or unsound practices
and/or breaches of fiduciary duty demonstrate the Respondent's
unfitness to serve as a director, officer, person participating in the
conduct of the affairs or as an institution-affiliated party of any
insured depository institution, or any other agency or organization
enumerated in section 8(e)(7)(A) of the Act, 12 U.S.C.
§1818(c)(7)(A).
The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the
following:
ORDER OF PROHIBITIONFROM FURTHER PARTICIPATION
1. John J. Schmalzer is hereby, 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), prohibited from:
[.1] (a) participating in any manner in the conduct of the affairs of any
financial institution or organization enumerated in section 8(e)(7)(A)
of the Act, 12 U.S.C. §1818(e)(7)(A);
[.2] (b) soliciting, procuring, transferring, attempting to transfer,
voting, or attempting to vote any proxy, consent or authorization with
respect to any voting rights in any financial institution enumerated in
section 8(e)(7)(A) of the Act, 12 U.S.C. §1818(e)(7)(A);
(c) violating any voting agreement previously approved by the
appropriate Federal banking agency; or
(d) voting for a director, or serving or acting as an
institution-affiliated party.
2. This ORDER will become effective ten (10) days after its
issuance. The provisions of this ORDER will 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 21st day of December, 2000.