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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 possible criminal charges in connection with a pretty hefty
percentage of the bank failures -- about 16%, if each of the 50 investigations
relates to a separate bank.
These reports of as many as 50 criminal investigations
are all the more striking because up to this point, the FDIC has not
conspicuously pursued criminal charges. The most prominent criminal charges
filed as part of the current wave of bank failures related to the
May 2010 indictment of two former officials from Integrity Bank in
Alpharetta, Georgia. Integrity Bank failed in
August 2008, which was fairly early in the current failed bank wave. Many
more banks have failed since then, and so the FDIC may just now be completing
its investigations of many of the later bank failures.
In the meantime, banks are continuing to fail. Just this
last Friday night, the FDIC closed
three more banks, bringing the 2010 YTD total number of bank failures to
149. (The Journal article does note that FDIC officials "expect the
failure wave to peak this year.")
Obviously, the FDIC has not even had an opportunity to
investigate the most recent bank failures, which suggests that the figure of
investigations could grow.
Read the Failed Bank-Related Activity Looming and Other Web Notes in its entirety at the D&O Diary, a blog by