Monday, February 6, 2012

Expect more lawsuits against officers of failed banks

Officers at failed banks may see a wave of lawsuits from the FDIC as the three-year period the regulatory body has to take action comes to a close for a number of banks, legal firm Bryan Cave's banking unit says.

Bank failures spiked in 2009, to 140 from 25 the year before. The three-year period the FDIC has to charge officers at those banks with negligence or other wrongdoing ends this year.

The most recent FDIC suit, against a failed California bank, came just days before that period came to an end, Bryan Cave points out. The FDIC has now sued officers and directors at about 20 failed banks.

In late December, the FDIC sued officers at The Bank of Asheville, claiming negligence in its rapid growth. Bryan Cave said that was an indication the regulatory body was becoming more aggressive.


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