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FDIC Enforcement Decisions and Orders |
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Bank officer prohibited from participating in the affairs of the bank or any other bank insured by the FDIC for engaging in unsafe or unsound banking practices and for engaging in acts, omissions, or practices that constitute a breach of his fiduciary duty as an officer of the bank.
[.1] Civil Money PenaltiesNotice of AssessmentFailure to Answer
[.2] Lending and Collection Policy and ProceduresUnsafe or Unsound Practices
[.3] Prohibition, Removal, or SuspensionFactors Determining Liability Unsafe or Unsound Practices
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On December 2, 1985, the Federal Deposit Insurance Corporation ("FDIC") issued a Notice of Intention to Prohibit From Further Participation ("Notice") against * * * ("Respondent"). Respondent was served with said Notice by certified mail and by personal service by the * * * Sheriff's Department on May 21, 1986. The Notice specifically informed Respondent that an answer was to be filed within 20 days from the date of service of the Notice. However, Respondent failed to file an answer to the Notice as required by section 308.06(a) of the FDIC's Rules of Practice and Procedure, 12 C.F.R. § 308.06(a).
RECOMMENDED DECISION AND
On December 2, 1985, the Federal Deposit Insurance Corporation ("FDIC") issued a Notice of Intention to Prohibit From Further Participation ("Notice") against * * * ("Respondent"). The Notice issued against Respondent * * * contained specific allegations for which an Order of Prohibition From Further Participation ("Order") could be issued against Respondent * * * under the provisions of section 8(e) of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)). The Notice specifically directed Respondent * * * to file an answer within twenty (20) days from the date of service of such Notice, as provided in section 308.06(a) of the FDIC Rules of Practice and Procedures. Respondent * * * was served with the Notice by certified mail and by personal service on May 21, 1986; however, Respondent * * * has not filed an Answer to the allegations contained in the Notice. On January 22, 1987, FDIC filed a Motion for Recommended Decision for Issuance of Order of Prohibition From Further Participation against Respondent * * * for failure of Respondent * * * to answer the allegations contained in the Notice pursuant to sections 308.06(d) of the FDIC Rules of Practice and Procedures (12 C.F.R. §§ 308.06(d)).
I. FINDINGS OF FACT
1. On December 2, 1985, and pursuant to the provisions of section 8(e) of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)) and Part 308 of the FDIC Rules of Practice and Procedures (12 C.F.R. § 308), the FDIC
{{4-1-90 p.A-1059}}issued a Notice of Intention to Prohibit From Further Participation ("Notice") against * * * ("Respondent"), formerly an officer and director of * * * Bank * * * ("Bank"), for the purpose of prohibiting Respondent * * * from any further participation in the conduct of the affairs of the Bank or any other insured bank without the prior approval of the FDIC.
[.1] 6. The Respondent * * * has failed to file an answer within the time required by section 308.06(a) of the FDIC Rules of Practice and Procedures (12 C.F.R. § 308.06(a)). Section 308.06(d) of the FDIC Rules of Practice and Procedures (12 C.F.R. § 308.06(d)) provides:
[.2] 11. Respondent * * *, while serving as president and chief executive officer of the Bank, engaged or participated in unsafe or unsound banking practices and a violation of law by causing and/or allowing the Bank to extend credit for the benefit of * * *, with such loans being in the names of nominee borrowers of limited financial capacity. Loans were made in the names of * * * dated December 20, 1983, * * * dated December 20, 1983, and * * * dated December 21, 1983. These loans totalled $225,000, of which all but $45,000 of the * * * loan was classified "Substandard" as of November 23, 1984. The remaining $45,000 portion of the * * * loan was classified "Loss" as of November 23, 1984.
II. CONCLUSIONS
Respondent has been duly served by the Federal Deposit Insurance Corporation with a Notice of Intention to Prohibit From Further Participation. This Notice contained allegations that Respondent committed violations of law, engaged or participated in unsafe or unsound banking practices, and committed or engaged in acts, omissions, or practices which constituted a breach of fiduciary duty as an officer or director of * * * Bank * * * that he received financial gain by reason of such violations, practices, and breaches of fiduciary duty and that such violations, practices, or breaches of fiduciary duty involved personal dishonesty and demonstrated a willful or continuing disregard for the safety and soundness of the Bank; and that these violations, practices or breaches of fiduciary duty have caused the Bank to suffer or will probably cause the Bank to suffer substantial financial loss or other damage and the interest of the Bank's depositors will be seriously prejudiced.
[.3] Appropriate findings of fact have been made heretofore, which findings of fact satisfy the statutory prerequisites for the issuance of an order of prohibition from further participation against Respondent * * *. Therefore, the FDIC may issue such an order of prohibition from participation as it may deem appropriate (12 U.S.C. § 1818(e)). Accordingly, it is recommended that the FDIC enter the following Order:
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It is ORDERED that: |
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Last Updated 6/6/2003 | legal@fdic.gov |