Gibraltar Dismisses Hayworth as CEO After Rothstein Ponzi Settlement

Gibraltar Private Bank & Trust has dismissed its chief executive as the Coral Gables, Fla. company continues to deal with the fallout from its ties to a lawyer convicted of running a $1.2 billion Ponzi scheme.

The $1.6 billion-asset Gibraltar named Adolfo Henriques chairman and chief executive, the South Florida Business Journal reported late Friday. Henriques, the bank's vice chairman, president and chief operating officer, replaces Steven Hayworth, who founded the company in 1984. The newspaper said Henriques declined to provide a reason for his promotion and Hayworth’s dismissal. Henriques did not return a call from American Banker seeking comment.

Regulators had recently ordered that Hayworth be removed, the newspaper said. The Office of the Comptroller of the Currency did not immediately return a call seeking comment.

Henriques will retain the president and COO titles, in addition to serving as chairman and CEO. Henriques was CEO of Regions Bank’s southern region from 1998 to 2005, and also previously worked at NationsBank and Barnett Bank.

The CEO shakeup comes after Gibraltar settled one of several lawsuits filed against the bank for its involvement with disbarred attorney Scott Rothstein, who is serving a 50-year jail term for defrauding investors of about $1.2 billion. Gibraltar reached a $10 million settlement in February with investors who claim they were defrauded by Rothstein, the Ft. Lauderdale Sun-Sentinel reported. Rothstein was part of a group of investors, including Hayworth, that acquired Gibraltar from Boston Private Financial Holdings in 2009; Hayworth had previously sold his bank to Boston Private.

TD Bank in February agreed to pay an undisclosed amount of damages to Rothstein’s victims, who had sued the bank for perpetuating the lawyer’s fraud by failing to report suspicious transactions. Rothstein had kept accounts at TD Bank. Also this year, a Florida jury ruled that TD Bank must pay $67 million in a separate lawsuit also related to Rothstein. TD Bank is appealing that verdict.

Gibraltar had been operating under a cease-and-desist order, issued by the Office of Thrift Supervision in 2010, related to anti-money laundering and Bank Secrecy Act compliance. The OCC,  which now supervises Gibraltar after the OTS was eliminated last summer, did not immediately return a call for comment on the status of the order.