A Failed Bank, A Lawsuit, and Some Interesting Questions

Though 268 banks have failed since January 1, 2008, there has been relatively little litigation related to the failed banks, as least so far. For example, the FDIC only recently filed its first action against former directors and officers of a failed bank (as discussed here ). There have also been...

A Failed Bank, A Lawsuit, And Some Interesting Questions

Though 268 banks have failed since January 1, 2008, there has been relatively little litigation related to the failed banks, as least so far. For example, the FDIC only recently filed its first action against former directors and officers of a failed bank (as discussed here ). There have also been relatively...

FDIC Targets Failed Bank Execs With Legal Action

WASHINGTON, D.C. — (AP) Federal regulators have authorized legal action against more than 50 executives and directors of collapsed U.S. banks as they seek to recover about $1 billion in losses. A spokesman for the Federal Deposit Insurance Corp. says. . . . Full version available to lexis.com subscribers...

UBS Will Take No Action Against Former Company Officials and Other Web Notes

In a public report that makes for some interesting reading, UBS on October 14, 2010 released a statement disclosing that though its own investigation had concluded that "what happened should not have been allowed to happen," the company will take no legal action against its former directors...

Commercial Banks: Closures, Lawsuits Continue to Mount

As has now become a familiar routine, this past Friday night the FDIC took control of several more commercial banks . The seven additional banks seized on Friday bring the year to date total number of failed banks to 139, and the total since January 1, 2008 to 304. At the same time, lawsuits involving...

FDIC Sues Failed Bank's Former Directors and Officers

If the lawsuit filed on Monday is any indication, the long-anticipated FDIC litigation against failed banks may have arrived. On November 1, 2010, the FDIC filed a lawsuit in the Northern District of Illinois against eleven former directors and officers of Heritage Community Bank, a lending institution...

Failed Bank-Related Activity Looming and Other Web Notes

The lead article in the November 17, 2010 Wall Street Journal reported that the FDIC is conducting 50 criminal investigations of directors, officers and employees of failed banks. Given that (as of November 19, 2010) 314 banks have failed since January 1, 2008, this report suggests that the FDIC is investigating...

Big 4 Bombshell: “We Didn’t Fail Banks Because They Were Getting A Bailout”

Leaders of the four largest global accounting firms - Ian Powell , chairman of PwC UK, John Connolly , Senior Partner and Chief Executive of Deloitte's UK firm and Global MD of its international firm, John Griffith-Jones , Chairman of KPMG's Europe, Middle East and Africa region and Chairman...

FDIC Sues Three WaMu Execs and Their Wives, Settles with Outside Directors

As recently as this past Monday, commentators were grumbling that the FDIC is moving too slowly in pursue claims against former directors and officers of failed banks. The FDIC has responded in dramatic fashion with a March 16, 2011 lawsuit filing in the Western District of Washington against three...

Number of Bank Failures Finally Starting to Decline?

When the FDIC released its Quarterly Banking Profile for the fourth quarter 2010, it included a statement from FDIC Chairman Sheila Bair that the agency believes "the number of failures peaked in 2010." However, at least through the end of February 2011, the evidence was to the contrary...

Washington Mutual Settles Class Action Lawsuit For $208.5 Million

LOS ANGELES - (AP) Washington Mutual Inc. and its fellow defendants have agreed to pay $208.5 million to settle a class-action lawsuit stemming from the lender's collapse in 2008, the biggest U.S. bank failure in history. The defendants and lead plaintiff Ontario Teachers' Pension Plan Board...

Stories We're Following: Failed Banks, China and More

The short week after the July 4 th holiday is usually quiet. There certainly did seem to be less traffic on the roads. But nevertheless, there was news of note this past week on several stories we have been following, as discussed below. The traffic on the roads may have slowed but the circulation...

FDIC Files Suit Against Former Haven Trust Directors and Officers

On July 14, 2011, the FDIC filed a lawsuit in the Northern District of Georgia against 15 former directors and officers of Haven Trust Bank of Duluth, Georgia. This suit is the ninth the FDIC has filed as part of the current bank failure wave and the second that the FDIC has filed in Georgia. A copy...

As Banks Fail, Will Insurance Coverage Lawsuits Follow?

One of the many distinctive traits of the litigation that surrounded the S&L crisis in the late 80s and early 90s was the plethora of lawsuits between the FDIC (and other federal banking regulators), on the one hand, and the failed banks' insurers, on the other hand, over the interpretation...

Meanwhile, The Number of Failed Banks Continues to Mount

Early on during the current wave of bank failures, there were some pretty reckless predictions about how many banks might fail - indeed, some commentators suggested as many as 1,000 banks might ultimately fail, a prediction that I disputed at the time . But while it continues to seem highly unlikely...

A Time-Ripened Tale of Toxic Assets, a Corporate Spin-Out and a Failed Bank

Guaranty Bank of Austin, Texas's August 21, 2009 closure is the fourth-largest bank failure during the current wave of bank failures and the tenth largest bank failure in U.S. history. The bank's failure, which came just 15 months after its publicly traded holding company spun out of Temple...

Two Questions: Bank Closures Winding Down? FDIC WaMu Lawsuit Settled?

Whether the process is just winding down for the year or the process is actually winding down for good, the bank closure rate has recently fallen off dramatically. The FDIC has not taken over any banks for three weeks straight, with no bank closure at all so far during the month of December. And...

FDIC: Problem Institutions Decline, But Concerns Remain

The FDIC's latest Quarterly Banking Profile for the period ending December 31, 2011, released February 28, 2012 ( here ), reflects a generally improving banking landscape and a continuing reduction in the number of problem institutions. But though the industry is showing improvement, the number...

Is the FDIC Ramping Up Its Failed Bank Litigation?

Though the current bank failure wave has been rolling for several years now and though there have been over 425 bank closures during that period , the much anticipated FDIC failed bank litigation has been slower to gain momentum - that is, perhaps, at least until now. Through the end of 2011, the...

FDIC: Banks Improve, Problem Institutions Continue to Decline

According to the FDIC's Quarterly Banking Profile for the first quarter of 2012, which can be found here and which was released on May 24, 2012, the banking industry generally continues to show improvement. The industry's aggregate profits are up, and the industry is shedding bad loans, bolstering...

FDIC Wins $168.8 Million Jury Verdict Against Former IndyMac Officers

On December 7, 2012, in a comprehensive victory for the FDIC in its capacity as receiver of the failed IndyMac bank, a jury in the Central District of California entered a verdict of $168.8 million in the FDIC's lawsuit against three former officers of the bank. As reflected in the verdict form...

Banks: Forget Too Big to Fail, How About Too Small to Succeed?

According to the FDIC’s latest Quarterly Banking Profile ( here ), as of September 30, 2013, there were 6,891 federally insured banking institutions, down from 6,940 at the end of the second quarter and down from 7,141 as of September 30, 2012. There were 8,680 banking institutions as recently...