FDIC to top executives at South Dakota's BankFirst: Pay up ($77.4 Million)

[kpete]

Source: Star Tribune



Citing "pervasive and persistent" misconduct, regulators want top executives of failed BankFirst to personally pay $77 million.

By CHRIS SERRES and JENNIFER BJORHUS, Star Tribune staff writers

Federal regulators are demanding that former executives and board members of BankFirst, a failed South Dakota bank with deep Twin Cities ties, personally pay $77.4 million for losses on bad loans it made during the real estate boom.

The move indicates regulators are toughening their stance on banker misconduct as they struggle to recover billions of dollars in losses on bank failures.

According to a March 26 letter obtained by the Star Tribune, the Federal Deposit Insurance Corp. accused nearly two dozen of BankFirst's top officers with failing to monitor the rapid growth of the bank while ignoring repeated regulatory warnings. As a result of what regulators described as "pervasive and persistent" misconduct, the former executives are now being held personally responsible for most of the estimated $90 million in losses the FDIC's insurance fund has incurred as part of BankFirst's failure last July.

The four-page letter came from the law firm of Leonard, O'Brien, Spencer, Gale & Sayre in Minneapolis, which is representing the FDIC as receiver for Sioux Falls, S.D.-based BankFirst. The firm declined to comment. Regulators shut down the bank this past July, and the letter indicates the FDIC's investigation is ongoing.

Read more: http://www.startribune.com/business/89963477.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUUT

[rfranklin]

1. Great, now how about all the big boys?

Or is this the sacrificial lamb?

[DCKit]

2. At the very least, it's a start. n/t

[Hawkowl]

4. What do you call 100 banksters at the bottom of the ocean?

A start! Ha. Recycled old lawyer joke.

[hughee99]

3. If only they were "too big to fail" they probably could have avoided this. n/t