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Subpoenas have been issued by South Carolina's Attorney General's Office in connection to allegations of financial mismanagement by former executives of CertusBank.
May 16 -
CertusBank in Greenville, S.C., continues to lose money, largely because of high expenses. The $1.6 billion-asset company lost $9 million in the first quarter, according to a call report filed with the Federal Deposit Insurance Corp.
May 1 -
Three of Certus' ousted executives depict a behind-the-scenes struggle at the Greenville, S.C., bank as management, directors and investors were often working at cross purposes. The lawsuit also discusses a possible merger with an unnamed bank that never took place.
April 24 -
CertusBank has terminated its top executive team, effective immediately, the $1.7 billion-asset bank announced Wednesday.
April 9 -
The "dream team" of bankers who set up Greenville, S.C.-based CertusBank attracted half a billion dollars from hedge funds to buy failed banks. Lately, the focus has shifted to big losses, lavish spending and payments to a consulting firm owned by top executives.
March 27
CertusBank fired its founders for providing inaccurate budgets and for failing to devise a strategy after its failed-bank deals dried up, the Greenville, S.C., company said in court filings.
The $1.7 billion-asset company said in a response to a lawsuit filed by Milton Jones, Walter Davis and Angela Webb that the decision to fire the executives was not racially motivated. Certus also denied in documents filed Friday in the District Court for South Carolina that it participated in a conspiracy to destroy the executives' reputations.
The ousted execs filed a lawsuit last month
CertusBank claimed in its response that the executives were dismissed because they failed to adhere to budgeted expense reductions as the company lost millions. The response also alleged that the executives tried to conceal from the board the depth of Certus' financial troubles and of investor dissatisfaction.
The company's finance department prepared a budget in early 2013 forecasting tens of millions in losses for the year, Certus said in its legal response. "Displeased with this projection," management reworked the budget to show a loss of just $3.5 million and then presented that forecast to the board, the documents added. Certus would go on to suffer a pretax loss of $84 million on the year; it
The founders also failed to convey investor criticism of them to outside directors, Certus claimed in its filing.
The Certus executives in December 2013 "began to receive letters from shareholders expressing great concern with the losses at the Bank and seeking information regarding the Bank's strategic plan moving forward," company claimed in its response. "These letters were not provided on a timely basis to the outside directors, and a number of the letters were later found unopened in the desk of a member of the [executive team] though these letters were individually addressed to the outside directors."
CertusBank has requested that the dispute with the ousted executive be handled through arbitration. Three of the company's four founders were
Weinger has not yet filed a response to the ousted executives' lawsuit.
The
The ousted executives claimed in their lawsuit that the expenses were appropriate and were approved and even encouraged by the board. They also claimed that payments to the consultancy, Integrated Capital Strategies, were approved by the board, investors, and the Office of the Comptroller of the Currency, and that none of the founders made a profit from their ownership of the consultancy.
CertusBank was founded in early 2011 with the backing of powerful New York hedge funds to buy failed banks in the Southeast. The company received a shelf charter after a group of prominent Democrats in the House of Representatives