Complimentary Webinar: Legal Actions by the FDIC to Recover Losses of Failed Banks.

Hosted by the AABD on December 7, 2011

The slides and audio program are available for this Complimentary Webinar that covered breaking  developments and evolving strategies to protect bank directors.

  • Richard Osterman, Deputy General Counsel FDIC
  • BuckleySandler: David Baris, Samuel J Buffone & Donna L Wilson

Listen to Webinar Audio

Download PDF: 12-7-11 Webinar Slides

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    Preparing for the Worst

    In the post financial crisis environment large numbers of FDIC insured institutions have either failed or are at risk of failing. The FDIC has the ability to sue officers and directors for losses to these financial institutions and has already instituted some of these suits.

    • Lessons Learned from the S&L Crisis: Following the S&L crisis the FDIC brought claims against the former officers and directors of approximately one quarter of the institutions that failed.
    • The FDIC Gears Up: The FDIC has significantly expanded its Professional Liability and Financial Crimes units and task forces have been established across federal law enforcement agencies.

    Post Failure Investigations by the FDIC

    Professional liability claim reviews of officers and directors are conducted as part of the FDIC's takeover of any failed institution.

    • Events at Closing: The FDIC assumes all rights of the institution including its relationship with its lawyers and control of its files.
    • Interviews at Bank Closing and Later: The FDIC will explore through interviews whether there are grounds to sue directors and officers.
    • Use of Investigative Subpoenas: The FDIC can use subpoenas to obtain documents or testimony to further its investigation of potential claims and whether those claims would be meritorious and cost effective.
    • Demand Letters: The FDIC uses demand letters to directors and officers of failed banks to put them on notice that it may seek payment from them for losses suffered by the FDIC as receiver of the failed bank.
    • Suits Against Officers and Directors: How are they authorized and when are they brought.
    • Criminal and Civil Referrals To Other Agencies: Criminal prosecutions in cases of fraud or other criminal wrongdoing.

    FDIC Lawsuits Against Officers & Directors

    • Claims For Breach Of The Duty of Loyalty
    • Claims For the Breach Of The Duty of Care

    What Can Officers and Directors Do Now to Protect Their Interests and the Interests of Their Institution

    A practical tool kit of steps that can be taken pre-seizure to prepare for the worst case scenario.