-
The FDIC has filed a lawsuit against former directors and executives at the failed Mutual Bank, claiming, among other things, that $250,000 was spent on a lavish wedding that management detailed as a bank function.
October 31 -
The dilemma for community bank directors is to choose between minimizing their personal liability and the useful function that board reviews of individual loans can serve.
June 14
The Federal Deposit Insurance Corp. has ruled a former Minnesota Vikings tight end out of bounds.
The federal agency wants to ban Stuart "Stu" Voigt — who went to the Super Bowl three times in the 1970s before moving into banking — from the industry and has levied a $125,000 civil money penalty against him, according to a notice of charges made public late last month.
Voigt is the former chairman of the $238 million-asset First Commercial Bank in Bloomington, Minn., and the FDIC says he acted improperly when he voted in favor of loans and extensions to a real-estate lender called Hennessey Financial LLC, starting in 2005. The problem? He failed to disclose that he separately had made a personal loan to Hennessey’s guarantor, whom the FDIC referred to as "Mr. X**" in the notice. By voting for the loans and modifications, the agency says, Voigt received a "tangible economic benefit which was not approved by the entire bank board and which was made on terms involving more than the normal risk of repayment and which presented unfavorable features."
The loan from First Commercial was originated in 2005 as a $1 million line of credit. It was renewed in 2006 and upped to $2 million. In 2007, the maturity date was pushed to April 18, 2008. It went into default on April 29, 2008 and the bank later charged off roughly $790,000 for the line.
Meanwhile, Mr. X** was repaying Voigt. In 2007, those payments from Mr. X** made up 104.2% of Voigt’s adjusted gross income, according to his tax returns, the FDIC notice says.
A call to Voigt's attorney was not returned, but the Pioneer Press, a St. Paul newspaper, reported that Voigt’s counsel has filed a lengthy response denying the charges.
