Fed order bars former Eagle Bancorp general counsel from industry

Laurence Bensignor, a former general counsel of Eagle Bancorp in Bethesda, Maryland, was barred from U.S. banking as part of an agreement tied to years-old insider loan scheme allegations involving the bank’s former chief executive.

In a consent prohibition order dated Nov. 8, the Federal Reserve Board said Bensignor had agreed not to work for “any insured depository institution or any holding company of an insured depository institution, or any subsidiary of such holding company.” He also cannot work for a foreign bank with U.S. operations.

Bensignor, who joined the company in April 2010 after nearly 30 years in the legal and real estate industries, retired from Eagle in 2018. Not long after,allegations involving mistreatment of related-party transactions and ties to a Washington councilman accused of ethics violations mounted against former CEO Ron Paul.

Bensignor, the Fed said in its order, “engaged in unsafe and unsound banking practices by failing to ensure that he disclosed, in accordance with the bank’s code of conduct and policies relevant to insider lending, certain information regarding the participation of various parties in certain transactions of the bank.”

Without confirming or denying any allegations, Bensignor agreed to refrain from working in the banking sector, according to the Fed. He also agreed to “fully cooperate with and provide substantial assistance” to the Fed, “including but not limited to the provision of information, testimony, documents, records, and other tangible evidence, in connection with any investigations” of the company or other individuals who are or were part of related investigations, according to the Fed order.

Earlier this year, Eagle Bancorp agreed to settle a class action alleging that it lacked sufficient internal controls under its previous management.

The $11.6 billion-asset Eagle disclosed that it would pay $7.5 million in exchange for a release of all claims against the company and current and former executives. Eagle and the executives did not admit or deny wrongdoing as part of the settlement, which resulted from nonbinding mediation that concluded in mid-April. The settlement addressed a shareholder lawsuit filed in the U.S. District Court for the Southern District of New York.

Neither the Fed nor Eagle immediately responded to requests for comment Tuesday.