Home » NEWS » Banking & Finance » 'Gross Negligence' is test for FDIC civil recoveries

'Gross Negligence' is test for FDIC civil recoveries

By Ted Carter

At a recent press conference, Federal Deposit Insurance Corporation Chairman Sheila Bair drew a distinction between investigations of bank executives and directors her office is doing and the criminal probes launched by the FDIC’s inspector general.
She said her agency has approved about 200 civil actions against bank officers and directors aimed at recovering about $2 billion. “Obviously — we probably won’t get all of that,” she said, according to official transcripts, but added she expects the FDIC will file “many more” additional recovery actions.
She said the general criteria for setting liability on external directors is “gross negligence.”
The test, she said, is whether the FDIC finds “a clear violation of obligations by the management and directors.”
Bair did not address the inspector general’s investigation of possible criminal wrongdoing by bankers and directors other than to say the FBI is working with the IG. She referred reporters to a Wall Street Journal report that said the IG is conducting 50 criminal investigations of former executives, directors and employees at U.S. banks that have failed since the start of the financial crisis.

BEFORE YOU GO…

… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Amy McCullough

Leave a Reply

Your email address will not be published. Required fields are marked *

*