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Enforcement Actions by Federal Banking Agencies

Jerry has significant experience litigating enforcement actions brought by federal banking agencies (FDIC, Federal Reserve Board, and the Office of the Comptroller of the Currency). These agencies are authorized by 12 U.S.C. § 1818 to bring cease-and-desist actions against insured depository institutions and/or their institution-affiliated parties (IAPs) (officers, directors, employee, agents, controlling stockholders, independent contractors (including attorneys, accountants, and appraisers) under certain circumstances. Enforcement actions may be initiated whenever the primary federal regulator concludes that a bank or an IAP is engaging in an unsafe or unsound practice in conducting the business of the bank or is violating a law, rule, or regulation, or any condition imposed in writing by the bank regulator.

The federal banking agencies are also authorized under section 1818 to bring suspension, removal, and prohibition actions against IAPs under certain conditions. And, they may institute proceedings under section 1818 civil-money-penalty (CMP) against banks or their IAPs where, among other things, they are (i) violating a law, rule, regulation, or condition imposed in writing, (ii) recklessly engaging in unsafe or unsound practices, (iii) breaches any fiduciary duty, or (iv) knowingly or recklessly causes a substantial loss to a bank or realizes a substantial gain or other benefit by reason of a violation, practice, or breach.

IN THE MATTER OF: GRANT THORNTON, LLP, EXTERNAL AUDITOR FOR THE FIRST NAT'L BANK OF KEYSTONE, KEYSTONE, WEST VIRGINIA

In the Matter of: Grant Thornton, LLP, External Auditor for the First Nat'l Bank of Keystone, Keystone, West Virginia, OCC-AA-EC-04-02, OCC-AA-EC-04-03 (Dec. 7, 2006) (served as “decisional counsel,” 12 C.F.R. § 19.40(c)) (in rendering a final decision in connection with a recommendation by an administrative law judge (ALJ) against imposing a cease-and-desist order and civil […]

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GRANT THORNTON, LLP V. OFFICE OF THE COMPTROLLER OF THE CURRENCY

Grant Thornton, LLP v. Office of the Comptroller of the Currency, 514 F.3d 1328 (D.C. Cir. 2008) (argued for OCC) (holding that an accounting firm was not subject to a cease-and-desist order or a CMP for accounting malpractice in failing to discover a massive fraud by a national bank in which half of its claimed […]

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GRANT THORNTON, LLP V. FDIC

Grant Thornton, LLP v. FDIC, 435 Fed. Appx. 188 (4th Cir. 2011) (affirming an award of over $20 million to FDIC as receiver for the same bank against the same accounting firm based on accounting malpractice, favorably citing the observation of the concurring judge in the opinion of the District of Columbia Circuit that the […]

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IN THE MATTER OF CARLOS LOUMIET, FORMER COUNSEL TO HAMILTON BANK, N.A.

In the matter of Carlos Loumiet, Former Counsel to Hamilton Bank, N.A. (Closed), Miami, Florida, Final Decision and Order, OCC-AA-EC-06-102 (July 27, 2009) (served as “decisional counsel,” 12 C.F.R. § 19.40(c)) (in rendering a final decision in connection with a recommendation by an administrative law judge (ALJ) against imposing a cease-and-desist order and civil money […]

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