FDIC PARTIAL LIST OF FAILED BANS FOR 2010

The following is a list of failed banks for 2010 which has been excerpted from the FDIC website. This list may not be complete at the time of compelation:

Bank Name City State CERT # Acquiring Institution Closing Date Updated Date

Woodlands Bank Bluffton SC 32571 Bank of the Ozarks July 16, 2010 November 1, 2010
Williamsburg First National Bank Kingstree SC 17837 First Citizens Bank and Trust Company, Inc. July 23, 2010 October 22, 2010
Wheatland Bank Naperville IL 58429 Wheaton Bank & Trust April 23, 2010 August 26, 2010
Westsound Bank Bremerton WA 34843 Kitsap Bank May 8, 2009 August 26, 2010
Westernbank Puerto Rico
En Español Mayaguez PR 31027 Banco Popular de Puerto Rico April 30, 2010 August 26, 2010
Western Commercial Bank Woodland Hills CA 58087 First California Bank November 5, 2010 November 12, 2010
WestBridge Bank and Trust Company Chesterfield MO 58205 Midland States Bank October 15, 2010 October 20, 2010
Waterford Village Bank Williamsville NY 58065 Evans Bank, N.A. July 24, 2009 August 27, 2010
Waterfield Bank Germantown MD 34976 No Acquirer March 5, 2010 August 27, 2010
Washington Mutual Bank
(Including its subsidiary Washington Mutual Bank FSB) Henderson NV 32633 JP Morgan Chase Bank September 25, 2008 November 9, 2010
Washington First International Bank Seattle WA 32955 East West Bank June 11, 2010 November 30, 2010
Warren Bank Warren MI 34824 The Huntington National Bank October 2, 2009 August 26, 2010
Wakulla Bank Crawfordville FL 21777 Centennial Bank October 1, 2010 October 7, 2010
Vineyard Bank Rancho Cucamonga CA 23556 California Bank & Trust July 17, 2009 August 27, 2010
Venture Bank Lacey WA 22868 First-Citizens Bank & Trust Company September 11, 2009 August 26, 2010
Vantus Bank Sioux City IA 27732 Great Southern Bank September 4, 2009 August 26, 2010
Valley Capital Bank, N.A. Mesa AZ 58399 Enterprise Bank & Trust December 11, 2009 August 27, 2010
USA Bank Port Chester NY 58072 New Century Bank July 9, 2010 October, 2010
Universal Federal Savings Bank Chicago IL 29355 Chicago Community Bank June 27, 2002 April 9, 2008
Unity National Bank Cartersville GA 34678 Bank of the Ozarks March 26, 2010 August 27, 2010
United Security Bank Sparta GA 22286 Ameris Bank November 6, 2009 August 27, 2010
United Commercial Bank San Francisco CA 32469 East West Bank November 6, 2009 August 27, 2010
Union Bank, National Association Gilbert AZ 34485 MidFirst Bank August 14, 2009 August 26, 2010
Turnberry Bank Aventura FL 32280 NAFH National Bank July 16, 2010 October 22, 2010
Towne Bank of Arizona Mesa AZ 57697 Commerce Bank of Arizona May 7, 2010 August 26, 2010
Town Community Bank & Trust Antioch IL 34705 First American Bank January 15, 2010 August 26, 2010
Tifton Banking Company Tifton GA 57831 Ameris Bank November 12, 2010 November 19, 2010
TierOne Bank Lincoln NE 29341 Great Western Bank June 4, 2010 September 10, 2010
Thunder Bank Sylvan Grove KS 10506 The Bennington State Bank July 23, 2010 October 22 2010
The Tattnall Bank Reidsville GA 12080 Heritage Bank of the South December 4, 2009 August 27, 2010
The Peoples Bank Winder GA 182 Community & Southern Bank September 17, 2010 October 29, 2010
The Park Avenue Bank New York NY 27096 Valley National Bank March 12, 2010 August 27, 2010
The La Coste National Bank La Coste TX 3287 Community National Bank February 19, 2010 November 3, 2010
The Gordon Bank Gordon GA 33904 Morris Bank October 22, 2010 October 27, 2010
The First National Bank of Barnesville Barnesville GA 2119 United Bank, Zebulon October 22, 2010 October 22, 2010
The Cowlitz Bank Longview WA 22643 Heritage Bank July 30, 2010 November 1, 2010
The Buckhead Community Bank Atlanta GA 34663 State Bank and Trust Company December 4, 2009 August 27, 2010
The Bank of Bonifay Bonifay FL 14246 First Federal Bank of Florida May 7, 2010 August 26, 2010
Temecula Valley Bank Temecula CA 34341 First-Citizens Bank & Trust Company July 17, 2009 August 27, 2010
TeamBank, NA Paola KS 4754 Great Southern Bank March 20, 2009 August 27, 2010
Tamalpais Bank San Rafael CA 33493 Union Bank, N.A. April 16, 2010 August 26, 2010
Superior Bank, FSB Hinsdale IL 32646 Superior Federal, FSB July 27, 2001 August 27, 2010
Sun West Bank Las Vegas NV 34785 City National Bank May 28, 2010 November 1, 2010
Sun American Bank Boca Raton FL 27126 First-Citizens Bank & Trust Company March 5, 2010 August 27, 2010
Suburban FSB Crofton MD 30763 Bank of Essex January 30, 2009 August 27, 2010
Strategic Capital Bank Champaign IL 35175 Midland States Bank May 22, 2009 August 27, 2010
Sterling Bank Lantana FL 32536 IBERIABANK July 23, 2010 July 30, 2010
Statewide Bank Covington LA 29561 Home Bank March 12, 2010 August 27, 2010
State Bank of Aurora Aurora MN 8221 Northern State Bank March 19, 2010 August 27, 2010
St. Stephen State Bank St. Stephen MN 17522 First State Bank of St. Joseph January 15, 2010 November 2, 2010
SouthwestUSA Bank Las Vegas NV 35434 Plaza Bank July 23, 2010 October 29, 2010
Southwest Community Bank Springfield MO 34255 Simmons First National Bank May 14, 2010 October 28, 2010
Southern Pacific Bank Torrance CA 27094 Beal Bank, SSB. February 7, 2003 October 20, 2008
Southern Community Bank Fayetteville GA 35251 United Community Bank June 19, 2009 August 27, 2010
Southern Colorado National Bank Pueblo CO 57263 Legacy Bank October 2, 2009 August 26, 2010
Sonoma Valley Bank Sonoma CA 27259 Westamerica Bank August 20, 2010 August 26, 2010
SolutionsBank Overland Park KS 4731 Arvest Bank December 11, 2009 August 27, 2010
Sinclair National Bank Gravette AR 34248 Delta Trust & Bank September 7, 2001 February 10, 2004
Silverton Bank, NA Atlanta GA 26535 No Acquirer May 1, 2009 August 27, 2010
Silver State Bank
En Español Henderson NV 34194 Nevada State Bank September 5, 2008 August 27, 2010
Silver Falls Bank Silverton OR 35399 Citizens Bank February 20, 2009 August 27, 2010
Shoreline Bank Shoreline WA 35250 GBC International Bank October 1, 2010 October 7, 2010
ShoreBank Chicago IL 15640 Urban Partnership Bank August 20, 2010 October 22, 2010
Sherman County Bank Loup City NE 5431 Heritage Bank February 13, 2009 August 27, 2010
Security Savings Bank, F.S.B. Olathe KS 30898 Simmons First National Bank October 15, 2010 October 20, 2010
Security Savings Bank Henderson NV 34820 Bank of Nevada February 27, 2009 August 27, 2010
Security Pacific Bank Los Angeles CA 23595 Pacific Western Bank November 7, 2008 August 27, 2010
Security Bank of North Metro Woodstock GA 57105 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of North Fulton Alpharetta GA 57430 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of Jones County Gray GA 8486 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of Houston County Perry GA 27048 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of Gwinnett County Suwanee GA 57346 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of Bibb County Macon GA 27367 State Bank and Trust Company July 24, 2009 August 27, 2010
Satilla Community Bank Saint Marys GA 35114 Ameris Bank May 14, 2010 August 26, 2010
Sanderson State Bank
En Español Sanderson TX 11568 The Pecos County State Bank December 12, 2008 August 27, 2010
San Joaquin Bank Bakersfield CA 23266 Citizens Business Bank October 16, 2009 August 26, 2010
San Diego National Bank San Diego CA 23594 U.S. Bank N.A. October 30, 2009 August 26, 2010
RockBridge Commercial Bank Atlanta GA 58315 No Acquirer December 18, 2009 August 27, 2010
Rock River Bank Oregon IL 15302 The Harvard State Bank July 2, 2009 August 27, 2010
Riverview Community Bank Otsego MN 57525 Central Bank October 23, 2009 August 26, 2010
Riverside National Bank of Florida Fort Pierce FL 24067 TD Bank, N.A. April 16, 2010 August 26, 2010
Riverside Bank of the Gulf Coast Cape Coral FL 34563 TIB Bank February 13, 2009 August 27, 2010
Republic Federal Bank, N.A. Miami FL 22846 1st United Bank December 11, 2009 August 27, 2010
Reliance Bank White Plains NY 26778 Union State Bank March 19, 2004 April 9, 2008
Ravenswood Bank Chicago IL 34231 Northbrook Bank and Trust Company August 6, 2010 October 29, 2010
Rainier Pacific Bank Tacoma WA 38129 Umpqua Bank February 26, 2010 August 27, 2010
R-G Premier Bank of Puerto Rico
En Español Hato Rey PR 32185 Scotiabank de Puerto Rico April 30, 2010 August 26, 2010
Pulaski Savings Bank Philadelphia PA 27203 Earthstar Bank November 14, 2003 July 22, 2005
Prosperan Bank Oakdale MN 35074 Alerus Financial, N.A. November 6, 2009 August 27, 2010
Progress Bank of Florida Tampa FL 32251 Bay Cities Bank October 22, 2010 October 27, 2010
Premier Bank Jefferson City MO 34016 Providence Bank October 15, 2010 October 20, 2010
Premier American Bank Miami FL 57147 Premier American Bank, N.A. January 22, 2010 August 26, 2010
Platinum Community Bank Rolling Meadows IL 35030 No Acquirer September 4, 2009 August 26, 2010
Pinnacle Bank of Oregon Beaverton OR 57342 Washington Trust Bank of Spokane February 13, 2009 August 27, 2010
Pinehurst Bank Saint Paul MN 57735 Coulee Bank May 21, 2010 August 26, 2010
Pierce Commercial Bank Tacoma WA 34411 Heritage Bank November 5, 2010 November 12, 2010
PFF Bank & Trust Pomona CA 28344 U.S. Bank, N.A. November 21, 2008 August 27, 2010
Peotone Bank and Trust Company Peotone IL 10888 First Midwest Bank April 23, 2010 August 26, 2010
Peoples First Community Bank Panama City FL 32167 Hancock Bank December 18, 2009 August 27, 2010
Peoples Community Bank West Chester OH 32288 First Financial Bank, N.A. July 31, 2009 August 27, 2010
Peninsula Bank Englewood FL 26563 Premier American Bank, N.A. June 25, 2010 September 22, 2010
Partners Bank Naples FL 57959 Stonegate Bank October 23, 2009 August 26, 2010
Park National Bank Chicago IL 11677 U.S. Bank N.A. October 30, 2009 August 26, 2010
Palos Bank and Trust Company Palos Heights IL 17599 First Midwest Bank August 13, 2010 November 1, 2010
Pacific State Bank Stockton CA 27090 Rabobank, N.A. August 20, 2010 November 30, 2010
Pacific National Bank San Francisco CA 30006 U.S. Bank N.A. October 30, 2009 August 26, 2010
Pacific Coast National Bank San Clemente CA 57914 Sunwest Bank November 13, 2009 August 27, 2010
Orion Bank Naples FL 22427 IBERIABANK November 13, 2009 August 27, 2010
Omni National Bank Atlanta GA 22238 No Acquirer March 27, 2009 August 27, 2010
Olde Cypress Community Bank Clewiston FL 28864 CenterState Bank of Florida July 16, 2010 November 29, 2010
Old Southern Bank Orlando FL 58182 Centennial Bank March 12, 2010 August 27, 2010
Ocala National Bank Ocala FL 26538 CenterState Bank of Florida January 30, 2009 August 27, 2010
Oakwood Deposit Bank Co. Oakwood OH 8966 The State Bank & Trust Company February 1, 2002 August 27, 2010
Northwest Bank & Trust Acworth GA 57658 State Bank and Trust Company July 30, 2010 November 29, 2010
North Houston Bank Houston TX 18776 U.S. Bank N.A. October 30, 2009 August 26, 2010
North County Bank Arlington WA 35053 Whidbey Island Bank September 24, 2010 September 29, 2010
NextBank, NA Phoenix AZ 22314 No Acquirer February 7, 2002 August 27, 2010
New South Federal Savings Bank Irondale AL 32276 Beal Bank December 18, 2009 August 27, 2010
New Liberty Bank Plymouth MI 35586 Bank of Ann Arbor May 14, 2010 August 26, 2010
New Frontier Bank Greeley CO 34881 No Acquirer April 10, 2009 August 27, 2010
New Century Bank Chicago IL 34821 MB Financial Bank, N.A. April 23, 2010 August 26, 2010
New Century Bank Shelby Township MI 34979 No Acquirer March 28, 2002 March 18, 2005
Nevada Security Bank Reno NV 57110 Umpqua Bank June 18, 2010 October 22, 2010
NetBank Alpharetta GA 32575 ING DIRECT September 28, 2007 August 27, 2010
Net 1st National Bank Boca Raton FL 26652 Bank Leumi USA March 1, 2002 April 9, 2008
Neighborhood Community Bank Newnan GA 35285 CharterBank June 26, 2009 August 27, 2010
National State Bank of Metropolis Metropolis IL 3815 Banterra Bank of Marion December 14, 2000 March 17, 2005
National Bank of Commerce Berkeley IL 19733 Republic Bank of Chicago January 16, 2009 August 27, 2010
Mutual Bank Harvey IL 18659 United Central Bank July 31, 2009 August 27, 2010
Mirae Bank Los Angeles CA 57332 Wilshire State Bank June 26, 2009 August 27, 2010
Millennium State Bank of Texas Dallas TX 57667 State Bank of Texas July 2, 2009 August 27, 2010
Midwest Bank and Trust Company Elmwood Park IL 18117 FirstMerit Bank, N.A. May 14, 2010 August 26, 2010
Michigan Heritage Bank Farmington Hills MI 34369 Level One Bank April 24, 2009 August 27, 2010
Miami Valley Bank Lakeview OH 16848 The Citizens Banking Company October 4, 2007 August 27, 2010
Metropolitan Savings Bank Pittsburgh PA 35353 Allegheny Valley Bank of Pittsburgh February 2, 2007 August 27, 2010
MetroPacific Bank Irvine CA 57893 Sunwest Bank June 26, 2009 August 27, 2010
Metro Bank of Dade County Miami FL 25172 NAFH National Bank July 16, 2010 October 29, 2010
Meridian Bank Eldred IL 13789 National Bank October 10, 2008 August 27, 2010
McIntosh Commercial Bank Carrollton GA 57399 CharterBank March 26, 2010 August 27, 2010
Marshall Bank, N.A. Hallock MN 16133 United Valley Bank January 29, 2010 August 26, 2010
Maritime Savings Bank West Allis WI 28612 North Shore Bank, FSB September 17, 2010 September 29, 2010
Marco Community Bank Marco Island FL 57586 Mutual of Omaha Bank February 19, 2010 August 27, 2010
Malta National Bank Malta OH 6629 North Valley Bank May 3, 2001 November 18, 2002
Mainstreet Savings Bank, FSB Hastings MI 28136 Commercial Bank July 16, 2010 July 22, 2010
Mainstreet Bank Forest Lake MN 1909 Central Bank August 28, 2009 August 26, 2010
Main Street Bank Northville MI 57654 Monroe Bank & Trust October 10, 2008 August 27, 2010
MagnetBank Salt Lake City UT 58001 No Acquirer January 30, 2009 September 22, 2010
Madisonville State Bank Madisonville TX 33782 U.S. Bank N.A. October 30, 2009 August 26, 2010
Los Padres Bank Solvang CA 32165 Pacific Western Bank August 20, 2010 October 22, 2010
Lincoln Park Savings Bank Chicago IL 30600 Northbrook Bank and Trust Company April 23, 2010 August 26, 2010
LibertyPointe Bank New York NY 58071 Valley National Bank March 11, 2010 August 27, 2010
LibertyBank Eugene OR 31964 Home Federal Bank July 30, 2010 August 6, 2010
Lakeside Community Bank Sterling Heights MI 34878 No Acquirer April 16, 2010 August 27, 2010
La Jolla Bank, FSB La Jolla CA 32423 OneWest Bank, FSB February 19, 2010 August 27, 2010
Key West Bank Key West FL 34684 Centennial Bank March 26, 2010 November 3, 2010
K Bank Randallstown MD 31263 Manufacturers and Traders Trust Company November 5, 2010 November 12, 2010
John Warner Bank Clinton IL 12093 State Bank of Lincoln July 2, 2009 August 27, 2010
Jennings State Bank Spring Grove MN 11416 Central Bank October 2, 2009 August 26, 2010
ISN Bank Cherry Hill NJ 57107 Customers Bank September 17, 2010 September 21, 2010
Irwin Union Bank, F.S.B. Louisville KY 57068 First Financial Bank, N.A. September 18, 2009 August 26, 2010
Irwin Union Bank and Trust Company Columbus IN 10100 First Financial Bank, N.A. September 18, 2009 August 26, 2010
Integrity Bank Jupiter FL 57604 Stonegate Bank July 31, 2009 August 27, 2010
Integrity Bank Alpharetta GA 35469 Regions Bank August 29, 2008 August 27, 2010
Innovative Bank Oakland CA 23876 Center Bank April 16, 2010 August 26, 2010
IndyMac Bank Pasadena CA 29730 OneWest Bank, FSB. July 11, 2008 August 27, 2010
Independent National Bank Ocala FL 27344 CenterState Bank of Florida, N.A. August 20, 2010 August 24, 2010
Independent Bankers' Bank Springfield IL 26820 The Independent BankersBank (TIB) December 18, 2009 August 27, 2010
InBank Oak Forest IL 20203 MB Financial Bank September 4, 2009 August 26, 2010
Imperial Savings and Loan Association Martinsville VA 31623 River Community Bank, N.A. August 20, 2010 October 22, 2010
Imperial Capital Bank La Jolla CA 26348 City National Bank December 18, 2009 August 27, 2010
Ideal Federal Savings Bank Baltimore MD 32456 No Acquirer July 9, 2010 July 12, 2010
Hume Bank Hume MO 1971 Security Bank March 7, 2008 August 27, 2010
Horizon Bank Bradenton FL 35061 Bank of the Ozarks September 10, 2010 November 1, 2010
Horizon Bank Bellingham WA 22977 Washington Federal Savings and Loan Association January 8, 2010 November 04, 2010
Horizon Bank Pine City MN 9744 Stearns Bank N.A. June 26, 2009 August 27, 2010
Home Valley Bank Cave Junction OR 23181 South Valley Bank & Trust July 23, 2010 October 29, 2010
Home National Bank Blackwell OK 11636 RCB Bank July 9, 2010 November 4, 2010
Home Federal Savings Bank Detroit MI 30329 Liberty Bank and Trust Company November 6, 2009 August 27, 2010
Hillcrest Bank Florida Naples FL 58336 Stonegate Bank October 23, 2009 August 26, 2010
Hillcrest Bank Overland Park KS 22173 Hillcrest Bank, N.A. October 22, 2010 October 27, 2010
High Desert State Bank Albuquerque NM 35279 First American Bank June 25, 2010 November 1, 2010
Heritage Community Bank Glenwood IL 20078 MB Financial Bank, N.A. February 27, 2009 August 27, 2010
Haven Trust Bank Florida Ponte Vedra Beach FL 58308 First Southern Bank September 24, 2010 October 28, 2010
Haven Trust Bank Duluth GA 35379 Branch Banking & Trust Company, (BB&T) December 12, 2008 August 27, 2010
Hamilton Bank, NA
En Español Miami FL 24382 Israel Discount Bank of New York January 11, 2002 August 27, 2010
Gulf State Community Bank Carrabelle FL 20340 Centennial Bank November 19, 2010 November 24, 2010
Guaranty National Bank of Tallahassee Tallahassee FL 26838 Hancock Bank of Florida March 12, 2004 August 30, 2010
Guaranty Bank Austin TX 32618 BBVA Compass August 21, 2009 August 26, 2010
Greater Atlantic Bank Reston VA 32583 Sonabank December 4, 2009 August 27, 2010
Great Basin Bank of Nevada Elko NV 33824 Nevada State Bank April 17, 2009 November 30, 2010
Granite Community Bank, NA Granite Bay CA 57315 Tri Counties Bank May 28, 2010 November 1, 2010
Georgian Bank Atlanta GA 57151 First Citizens Bank and Trust Company, Inc. September 25, 2009 August 26, 2010
George Washington Savings Bank Orland Park IL 29952 FirstMerit Bank, N.A. February 19, 2010 August 27, 2010
Gateway Bank of St. Louis St. Louis MO 19450 Central Bank of Kansas City November 6, 2009 August 27, 2010
Frontier Bank Everett WA 22710 Union Bank, N.A. April 30, 2010 August 26, 2010
Freedom Bank of Georgia Commerce GA 57558 Northeast Georgia Bank March 6, 2009 August 27, 2010
Freedom Bank Bradenton FL 57930 Fifth Third Bank October 31, 2008 August 27, 2010
Franklin Bank, SSB Houston TX 26870 Prosperity Bank November 7, 2008 August 27, 2010
Founders Bank Worth IL 18390 The PrivateBank and Trust Company July 2, 2009 August 27, 2010
Florida Community Bank Immokalee FL 5672 Premier American Bank, N.A. January 29, 2010 August 26, 2010
Flagship National Bank Bradenton FL 35044 First Federal Bank of Florida October 23, 2009 August 26, 2010
FirstCity Bank Stockbridge GA 18243 No Acquirer March 20, 2009 August 27, 2010
FirstBank Financial Services McDonough GA 57017 Regions Bank February 6, 2009 August 27, 2010
First Vietnamese American Bank
In Vietnamese Westminster CA 57885 Grandpoint Bank November 5, 2010 November 12, 2010
First Suburban National Bank Maywood IL 16089 Seaway Bank and Trust Company October 22, 2010 October 27, 2010
First State Bank of Winchester Winchester IL 11710 The First National Bank of Beardstown July 2, 2009 August 27, 2010
First State Bank of Altus Altus OK 9873 Herring Bank July 31, 2009 August 27, 2010
First State Bank Flagstaff AZ 34875 Sunwest Bank September 4, 2009 August 26, 2010
First State Bank Sarasota FL 27364 Stearns Bank, N.A. August 7, 2009 September 23, 2010
First Security National Bank Norcross GA 26290 State Bank and Trust Company December 4, 2009 August 27, 2010
First Regional Bank Los Angeles CA 23011 First-Citizens Bank & Trust Company January 29, 2010 August 26, 2010
First Priority Bank Bradenton FL 57523 SunTrust Bank August 1, 2008 August 27, 2010
First Piedmont Bank Winder GA 34594 First American Bank and Trust Company July 17, 2009 August 27, 2010
First National Bank of the South Spartanburg SC 35383 NAFH National Bank July 16, 2010 November 1, 2010
First National Bank of Nevada Reno NV 27011 Mutual of Omaha Bank July 25, 2008 August 27, 2010
First National Bank of Georgia Carrollton GA 16480 Community and Southern Bank January 29, 2010 November 3, 2010
First National Bank of Danville Danville IL 3644 First Financial Bank, N.A. July 2, 2009 August 27, 2010
First National Bank of Blanchardville Blanchardville WI 11639 The Park Bank May 9, 2003 September 21, 2010
First National Bank of Anthony Anthony KS 4614 Bank of Kansas June 19, 2009 August 27, 2010
First National Bank Savannah GA 34152 The Savannah Bank, N.A. June 25, 2010 October 21, 2010
First National Bank Rosedale MS 15814 The Jefferson Bank June 4, 2010 August 26, 2010
First Lowndes Bank Fort Deposit AL 24957 First Citizens Bank March 19, 2010 November 03, 2010
First Integrity Bank, NA Staples MN 12736 First International Bank and Trust May 30, 2008 August 27, 2010
First Heritage Bank, NA Newport Beach CA 57961 Mutual of Omaha Bank July 25, 2008 August 27, 2010
First Georgia Community Bank Jackson GA 34301 United Bank December 5, 2008 August 27, 2010
First Federal Bank of North Florida Palatka FL 28886 TD Bank, N.A. April 16, 2010 August 27, 2010
First Federal Bank of California, F.S.B. Santa Monica CA 28536 OneWest Bank December 18, 2009 August 26, 2010
First DuPage Bank Westmont IL 35038 First Midwest Bank October 23, 2009 August 26, 2010
First Coweta Bank Newnan GA 57702 United Bank August 21, 2009 August 26, 2010
First Commerce Community Bank Douglasville GA 57448 Community & Southern Bank September 17, 2010 September 22, 2010
First Banking Center Burlington WI 5287 First Michigan Bank November 19, 2010 November 24, 2010
First BankAmericano Elizabeth NJ 34270 Crown Bank July 31, 2009 August 27, 2010
First Bank of Kansas City Kansas City MO 25231 Great American Bank September 4, 2009 August 26, 2010
First Bank of Jacksonville Jacksonville FL 27573 Ameris Bank October 22, 2010 October 27, 2010
First Bank of Idaho Ketchum ID 34396 U.S. Bank, N.A. April 24, 2009 August 27, 2010
First Bank of Beverly Hills Calabasas CA 32069 No Acquirer April 24, 2009 August 27, 2010
First Arizona Savings, A FSB Scottsdale AZ 32582 No Acquirer October 22, 2010 October 27, 2010
First Alliance Bank & Trust Co. Manchester NH 34264 Southern New Hampshire Bank & Trust February 2, 2001 February 18, 2003
Farmers Bank of Cheneyville Cheneyville LA 16445 Sabine State Bank & Trust December 17, 2002 October 20, 2004
Evergreen Bank Seattle WA 20501 Umpqua Bank January 22, 2010 August 26, 2010
Eurobank
En Español San Juan PR 27150 Oriental Bank and Trust April 30, 2010 August 26, 2010
Elizabeth State Bank Elizabeth IL 9262 Galena State Bank and Trust Company July 2, 2009 August 27, 2010
ebank Atlanta GA 34682 Stearns Bank, N.A. August 21, 2009 August 26, 2010
Dwelling House Savings and Loan Association Pittsburgh PA 31559 PNC Bank, N.A. August 14, 2009 August 26, 2010
Downey Savings & Loan Newport Beach CA 30968 U.S. Bank, N.A. November 21, 2008 August 27, 2010
Douglass National Bank Kansas City MO 24660 Liberty Bank and Trust Company January 25, 2008 August 27, 2010
Dollar Savings Bank Newark NJ 31330 No Acquirer February 14, 2004 April 9, 2008
Desert Hills Bank Phoenix AZ 57060 New York Community Bank March 26, 2010 August 27, 2010
Darby Bank & Trust Co. Vidalia GA 14580 Ameris Bank November 12, 2010 November 19, 2010
Crescent Bank and Trust Company Jasper GA 27559 Renasant Bank July 23, 2010 September 13, 2010
County Bank Merced CA 22574 Westamerica Bank February 6, 2009 August 27, 2010
Corus Bank, N.A. Chicago IL 13693 MB Financial Bank, N.A. September 11, 2009 August 26, 2010
Corn Belt Bank & Trust Co. Pittsfield IL 16500 The Carlinville National Bank February 13, 2009 August 27, 2010
Copper Star Bank Scottsdale AZ 35463 Stearns Bank, N.A. November 12, 2010 November 19, 2010
Cooperative Bank Wilmington NC 27837 First Bank June 19, 2009 August 27, 2010
Connecticut Bank of Commerce Stamford CT 19183 Hudson United Bank June 26, 2002 August 27, 2010
Community Security Bank New Prague MN 34486 Roundbank July 23, 2010 November 17, 2010
Community National Bank of Sarasota County Venice FL 27183 Stearns Bank, N.A. August 7, 2009 August 26, 2010
Community National Bank at Bartow Bartow FL 25266 CenterState Bank of Florida, N.A. August 20, 2010 October 22, 2010
Community First Bank Prineville OR 23268 Home Federal Bank August 7, 2009 August 26, 2010
Community Bank of West Georgia Villa Rica GA 57436 No Acquirer June 26, 2009 August 27, 2010
Community Bank of Nevada Las Vegas NV 34043 No Acquirer August 14, 2009 August 26, 2010
Community Bank of Lemont Lemont IL 35291 U.S. Bank N.A. October 30, 2009 August 26, 2010
Community Bank of Arizona Phoenix AZ 57645 MidFirst Bank August 14, 2009 August 26, 2010
Community Bank and Trust Cornelia GA 5702 SCBT National Association January 29, 2010 August 26, 2010
Community Bank Loganville GA 16490 Bank of Essex November 21, 2008 August 27, 2010
Commerce Bank of Southwest Florida Fort Myers FL 58016 Central Bank November 20, 2009 August 27, 2010
Columbian Bank & Trust Topeka KS 22728 Citizens Bank & Trust August 22, 2008 August 27, 2010
Columbia River Bank The Dalles OR 22469 Columbia State Bank January 22, 2010 November 2, 2010
Colorado National Bank Colorado Springs CO 18896 Herring Bank March 20, 2009 August 27, 2010
Colonial Bank Montgomery AL 9609 Branch Banking and Trust Company, (BB&T) August 14, 2009 August 26, 2010
Coastal Community Bank Panama City Beach FL 9619 Centennial Bank July 30, 2010 October 29, 2010
City Bank Lynnwood WA 21521 Whidbey Island Bank April 16, 2010 November 29, 2010
Citizens State Bank New Baltimore MI 1006 No Acquirer December 18, 2009 August 27, 2010
Citizens National Bank Teague TX 25222 U.S. Bank N.A. October 30, 2009 August 26, 2010
Citizens National Bank Macomb IL 5757 Morton Community Bank May 22, 2009 August 27, 2010
Citizens Community Bank Ridgewood NJ 57563 North Jersey Community Bank May 1, 2009 August 27, 2010
Citizens Bank and Trust Company of Chicago Chicago IL 34658 Republic Bank of Chicago April 23, 2010 November 4, 2010
Charter Bank Santa Fe NM 32498 Charter Bank January 22, 2010 August 26, 2010
Champion Bank Creve Coeur MO 58362 BankLiberty April 30, 2010 August 26, 2010
CF Bancorp Port Huron MI 30005 First Michigan Bank April 30, 2010 August 26, 2010
Century Security Bank Duluth GA 58104 Bank of Upson March 19, 2010 August 27, 2010
Century Bank, F.S.B. Sarasota FL 32267 IBERIABANK November 13, 2009 August 27, 2010
Centennial Bank Ogden UT 34430 No Acquirer March 5, 2010 August 27, 2010
Carson River Community Bank Carson City NV 58352 Heritage Bank of Nevada February 26, 2010 August 27, 2010
CapitalSouth Bank Birmingham AL 22130 IBERIABANK August 21, 2009 August 26, 2010
Cape Fear Bank Wilmington NC 34639 First Federal Savings and Loan Association April 10, 2009 August 27, 2010
California National Bank Los Angeles CA 34659 U.S. Bank N.A. October 30, 2009 August 26, 2010
Butte Community Bank Chico CA 33219 Rabobank, N.A. August 20, 2010 October 28, 2010
Butler Bank Lowell MA 26619 People's United Bank April 16, 2010 November 4, 2010
Broadway Bank Chicago IL 22853 MB Financial Bank, N.A. April 23, 2010 November 03, 2010
Brickwell Community Bank Woodbury MN 57736 CorTrust Bank N.A. September 11, 2009 August 26, 2010
Bramble Savings Bank Milford OH 27808 Foundation Bank September 17, 2010 October 22, 2010
Bradford Bank Baltimore MD 28312 Manufacturers and Traders Trust Company (M&T Bank) August 28, 2009 August 26, 2010
Benchmark Bank Aurora IL 10440 MB Financial Bank, N.A. December 4, 2009 August 27, 2010
Beach First National Bank Myrtle Beach SC 34242 Bank of North Carolina April 9, 2010 August 27, 2010
BC National Banks Butler MO 17792 Community First Bank April 30, 2010 November 4, 2010
Bayside Savings Bank Port Saint Joe FL 57669 Centennial Bank July 30, 2010 October 22, 2010
Bay National Bank Baltimore MD 35462 Bay Bank, FSB July 9, 2010 July 19, 2010
Barnes Banking Company Kaysville UT 1252 No Acquirer January 15, 2010 August 26, 2010
BankUnited, FSB Coral Gables FL 32247 BankUnited May 21, 2009 November 12, 2010
BankFirst Sioux Falls SD 34103 Alerus Financial, N.A. July 17, 2009 August 27, 2010
Bank USA, N.A. Phoenix AZ 32218 U.S. Bank N.A. October 30, 2009 August 26, 2010
Bank of Wyoming Thermopolis WY 22754 Central Bank & Trust July 10, 2009 August 27, 2010
Bank of Sierra Blanca Sierra Blanca TX 22002 The Security State Bank of Pecos January 18, 2002 November 6, 2003
Bank of Lincolnwood Lincolnwood IL 17309 Republic Bank of Chicago June 5, 2009 August 27, 2010
Bank of Leeton Leeton MO 8265 Sunflower Bank, N.A. January 22, 2010 August 26, 2010
Bank of Illinois Normal IL 9268 Heartland Bank and Trust Company March 5, 2010 August 27, 2010
Bank of Honolulu Honolulu HI 21029 Bank of the Orient October 13, 2000 March 17, 2005
Bank of Hiawassee Hiawassee GA 10054 Citizens South Bank March 19, 2010 August 27, 2010
Bank of Florida - Tampa Tampa FL 57814 EverBank May 28, 2010 August 26, 2010
Bank of Florida - Southwest Naples FL 35106 EverBank May 28, 2010 August 26, 2010
Bank of Florida - Southeast Fort Lauderdale FL 57360 EverBank May 28, 2010 August 26, 2010
Bank of Ephraim Ephraim UT 1249 Far West Bank June 25, 2004 April 9, 2008
Bank of Elmwood Racine WI 18321 Tri City National Bank October 23, 2009 August 26, 2010
Bank of Ellijay Ellijay GA 58197 Community & Southern Bank September 17, 2010 September 23, 2010
Bank of Clark County Vancouver WA 34959 Umpqua Bank January 16, 2009 August 27, 2010
Bank of Alamo Alamo TN 9961 No Acquirer November 8, 2002 March 18, 2005
Arcola Homestead Savings Bank Arcola IL 31813 No Acquirer June 4, 2010 August 26, 2010
Appalachian Community Bank Ellijay GA 33989 Community & Southern Bank March 19, 2010 August 27, 2010
ANB Financial, NA Bentonville AR 33901 Pulaski Bank and Trust Company May 9, 2008 August 27, 2010
AmTrust Bank Cleveland OH 29776 New York Community Bank December 4, 2009 August 27, 2010
AmTrade International Bank
En Español Atlanta GA 33784 No Acquirer September 30, 2002 September 11, 2006
AmericanFirst Bank Clermont FL 57724 TD Bank, N.A. April 16, 2010 November 8, 2010
American United Bank Lawrenceville GA 57794 Ameris Bank October 23, 2009 August 26, 2010
American Sterling Bank Sugar Creek MO 8266 Metcalf Bank April 17, 2009 August 27, 2010
American Southern Bank Kennesaw GA 57943 Bank of North Georgia April 24, 2009 August 27, 2010
American National Bank Parma OH 18806 The National Bank and Trust Company March 19, 2010 November 4, 2010
American Marine Bank Bainbridge Island WA 16730 Columbia State Bank January 29, 2010 August 26, 2010
America West Bank Layton UT 35461 Cache Valley Bank May 1, 2009 August 26, 2010
Ameribank Northfork WV 6782 The Citizens Savings Bank

Pioneer Community Bank, Inc. September 19, 2008 August 27, 2010
Amcore Bank, National Association Rockford IL 3735 Harris N.A. April 23, 2010 August 26, 2010
Alpha Bank & Trust Alpharetta GA 58241 Stearns Bank, N.A. October 24, 2008 August 27, 2010
Alliance Bank Culver City CA 23124 California Bank & Trust February 6, 2009 August 27, 2010
Allegiance Bank of North America Bala Cynwyd PA 35078 VIST Bank November 19, 2010 November 24, 2010
Affinity Bank Ventura CA 27197 Pacific Western Bank August 28, 2009 August 26, 2010
Advanta Bank Corp. Draper UT 33535 No Acquirer March 19, 2010 September 16, 2010
Access Bank Champlin MN 16476 PrinsBank May 7, 2010 August 26, 2010
1st Pacific Bank of California San Diego CA 35517 City National Bank May 7, 2010 August 26, 2010
1st American State Bank of Minnesota Hancock MN 15448 Community Development Bank, FSB February 5, 2010 November 8, 2010
1st Centennial Bank Redlands CA 33025 First California Bank January 23, 2009 August 27, 2010

Last Updated 11/29/2010 cservicefdicdal@fdic.gov

HAPPY NEW YEAR

ALCATEL PAYS $137 MILLION IN FINES TO SETTLE BRIBERY CHARGES

Paying bribes is the antithesis of capitalism. It allows very large established and often wasteful companies with incompetent management to out-bid smaller streamlined organizations that will get a job done faster, more economically and with better quality than their larger counterparts.

The following case excerpt was published on the SEC web site. It alleges that a major U.S. corporation violated the Foreign Corrupt Practices Act by paying off foreign officials. Please take a look at the details of this case:

"The Securities and Exchange Commission filed a settled enforcement action on December 27, 2010, in the U.S. District Court for the Southern District of Florida to resolve charges that Alcatel-Lucent, S.A. (Alcatel) violated the anti-bribery, books and records, and internal controls provisions of the Foreign Corrupt Practices Act (FCPA) by paying bribes to foreign government officials to obtain or retain business in Latin America and Asia.

Alcatel, the provider of telecommunications equipment and services, has offered to pay a total of $137.372 million in disgorgement and fines, including $45.372 million in disgorgement to the SEC. In a related action, Alcatel will pay a $92 million criminal fine to the U.S. Department of Justice.

The SEC’s complaint, filed in the Southern District of Florida, alleges that Alcatel’s bribes went to government officials in Costa Rica, Honduras, Malaysia, and Taiwan between December 2001 and June 2006. An Alcatel subsidiary provided at least $14.5 million to consulting firms through sham consulting agreements for use in the bribery scheme in Costa Rica. Various high-level government officials in Costa Rica received at least $7 million of the $14.5 million to ensure Alcatel obtained or retained three contracts to provide telephone services in Costa Rica.

The SEC alleges that the same Alcatel subsidiary bribed officials in the government of Honduras to obtain or retain five telecommunications contracts. Another Alcatel subsidiary made bribery payments to Malaysian government officials in order to procure a telecommunications contract. An Alcatel subsidiary also made illegal payments to various officials in the government of Taiwan to win a contract to supply railway axle counters to the Taiwan Railway Administration.

According to the SEC’s complaint, all of the bribery payments were undocumented or improperly recorded as consulting fees in the books of Alcatel’s subsidiaries and then consolidated into Alcatel’s financial statements. The leaders of several Alcatel subsidiaries and geographical regions, including some who reported directly to Alcatel’s executive committee, either knew or were severely reckless in not knowing about the misconduct.

The SEC’s complaint charges that Alcatel violated Section 30A of the Securities Exchange Act of 1934 by making illicit payments to foreign government officials, through its subsidiaries and agents, in order to obtain or retain business. Alcatel violated Section 13(b)(2)(B) of the Exchange Act by failing to have adequate internal controls to detect and prevent the payments. Alcatel violated Section 13(b)(2)(A) of the Exchange Act by improperly recording the payments in its books and records. Alcatel violated Section 13(b)(5) of the Exchange Act when its subsidiaries knowingly failed to implement a system of internal controls and knowingly falsified their books and records to camouflage bribes as consulting payments. Without admitting or denying the SEC’s allegations, Alcatel has consented to a court order permanently enjoining it from future violations of these statutory provisions; ordering the company to pay $45.372 million in disgorgement of wrongfully obtained profits, and ordering it to comply with certain undertakings, including an independent monitor for a three year term.

The SEC acknowledges the assistance of the U.S. Department of Justice, Fraud Section; the Federal Bureau of Investigation; the Office of the Attorney General in Costa Rica; the Fiscalía de Delitos Económicos, Corrupción y Tributarios in Costa Rica; and the Service Central de Prévention de la Corruption in France."

The current SEC seems to have done well in recovering monies in this case. Alleged crimes like this seldom see the light of day and it is good the SEC published it on their web page.

POLITICIANS, PENSION FUNDS AND THE COMMON KICKBACK

Below is the summary of a very complicated kickback scheme involving Quadrangle Group and the New York Sate Common Retirement Fund. It is a really good example of how politicians and businessmen work so well together in America. Luckily, the SEC performed it’s policing duties quite well in this case which brought about a very large fine for Steve Rattner of the Quadrangle Group. The following is an excerpt from the SEC web page:

“Washington, D.C., Nov. 18, 2010 — The Securities and Exchange Commission today charged former Quadrangle Group principal Steven Rattner with participating in a widespread kickback scheme to obtain investments from New York’s largest pension fund.

The SEC alleges that Rattner secured investments for Quadrangle from the New York State Common Retirement Fund after he arranged for a firm affiliate to distribute the DVD of a low-budget film produced by the Retirement Fund’s chief investment officer and his brothers. Rattner then caused Quadrangle to retain Henry Morris – the top political advisor and chief fundraiser for former New York State Comptroller Alan Hevesi – as a “placement agent” and pay him more than $1 million in sham fees even though Rattner was already dealing directly with then-New York State Deputy Comptroller David Loglisci and did not need an introduction to the Retirement Fund.
The SEC alleges that after receiving pressure from Morris, Rattner also arranged a $50,000 contribution to Hevesi’s re-election campaign. Just a month later, Loglisci increased the Retirement Fund’s investment with Quadrangle from $100 million to $150 million. As a result of the $150 million investment with Quadrangle, the Retirement Fund paid management fees to a Quadrangle subsidiary. By virtue of his partnership interest in Quadrangle and its affiliates, Rattner’s personal share of these fees totals approximately $3 million.
Rattner agreed to settle the SEC’s charges by paying $6.2 million and consenting to a bar from associating with any investment adviser or broker-dealer for at least two years.
“New York State retirees deserve investment advisers that are selected through a transparent, conflict-free process, not through payoffs, undisclosed financial arrangements and movie distribution deals,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.
David Rosenfeld, Associate Director of the SEC’s New York Regional Office, added, “Rattner delivered special favors and conducted sham transactions that corrupted the Retirement Fund’s investment process. The assets of New York State workers were invested for the hidden purpose of enriching Morris and Loglisci’s brother.”
The SEC previously charged Morris and Loglisci for orchestrating the fraudulent scheme that extracted kickbacks from investment management firms seeking to manage the assets of the Retirement Fund. The SEC charged Quadrangle earlier this year.
According to the SEC’s complaint against Rattner filed in U.S. District Court for the Southern District of New York, Morris informed Rattner in the fall of 2003 that Loglisci’s brother was involved in producing a film called “Chooch.” Morris suggested that Rattner help Loglisci’s brother with the theatrical distribution of the film. Rattner met with Loglisci’s brother and agreed to assist him, but Rattner’s efforts did not lead to a distribution deal. Approximately one year later, Loglisci’s brother contacted Rattner about DVD distribution of “Chooch.” Within days of speaking to Loglisci’s brother, Rattner contacted Loglisci about investing in a new Quadrangle private equity fund being marketed by the firm. Rattner told Loglisci that he had arranged a meeting between Loglisci’s brother and a Quadrangle affiliate — GT Brands — to discuss a possible DVD distribution deal.
The SEC alleges that after Loglisci’s brother met with GT Brands and telephoned Rattner to complain about the treatment he had received from GT Brands, Rattner warned a GT Brands executive to treat Loglisci’s brother “carefully” because Quadrangle was trying to obtain an investment through Loglisci. After GT Brands made clear to Rattner that it was not interested in distributing the film, Rattner instructed the GT Brands executive to “dance along” with Loglisci’s brother. According to an e-mail, Rattner telephoned Morris to inquire whether “GT needs to distribute [the Chooch] video” in order to secure an investment from the Retirement Fund. Morris offered to “nose around” to determine how important the DVD distribution deal was to Loglisci. GT Brands ultimately reversed course and offered to manufacture and distribute the DVD at a discount from its standard fee. Rattner approved the proposed terms of the distribution deal.
The SEC’s complaint alleges that in late October 2004, after Rattner and others from Quadrangle had already met with Loglisci and the Retirement Fund’s private equity consultant and received encouraging feedback from both of them, Morris met with Rattner and offered his placement agent services to Quadrangle. Morris warned Rattner that Quadrangle’s negotiations with the Retirement Fund could always fall apart. Although Quadrangle was already working with a placement agent, Quadrangle agreed to pay Morris as well.
According to the SEC’s complaint, soon after Quadrangle retained Morris as a placement agent and Rattner had advised Morris that GT Brands was moving forward with the deal to distribute the Chooch DVD, Loglisci personally informed Rattner that the Retirement Fund would be making a $100 million investment in the Quadrangle fund.
The SEC alleges that Morris later contacted Rattner and pressed him for a financial contribution to Hevesi’s re-election campaign. Although Rattner purportedly had a personal policy that he would not make political contributions to politicians who have influence over public pension funds, Rattner agreed to find someone else to make the contribution. After speaking with Morris, Rattner asked a friend and the friend’s wife to each contribute $25,000 to Hevesi’s campaign. The day after these contributions were communicated to Hevesi’s campaign staff, Hevesi telephoned Rattner and left him a message thanking him for the contribution. In late May 2006, Rattner’s friend transmitted the promised campaign contributions to Rattner, who forwarded the two checks to Hevesi’s campaign. Approximately one month later, Loglisci committed the Retirement Fund to an additional $50 million investment in the Quadrangle fund.
In settling the SEC’s charges without admitting or denying the allegations, Rattner consented to the entry of a judgment that permanently enjoins him from violating Section 17(a)(2) of the Securities Act of 1933 and orders him to pay approximately $3.2 million in disgorgement and a $3 million penalty. The settlement is subject to court approval. Rattner also consented to the entry of a Commission order that will bar him from associating with any investment adviser or broker-dealer with the right to reapply after two years.”

Shake downs by state and local politicians is very common in America. I remember when my parents wanted a building permit to put up a cabin in Northern Michigan the local building inspector had to collect a fee for the permit which presumably went to the county and a bottle of Whiskey which most likely stayed with the inspector. No one cared about the little gratuity since once it was paid you could build anything and it would pass inspection. Today of course the price of paying off public officials is far more than a bottle of even one of the best bourbons distilled in Kentucky.

In the above case the SEC has again proved itself as an advocate for the people when businessmen and politicians work together against the interests of the general public. It is sad that so many people in America believe that giving and receiving bribes is just a part of capitalism. Indeed it is the way capitalism works in poor undeveloped regions of our planet. Real capitalism as practiced in the civilized world has more to do with competition between firms over the price and quality of goods and services; not competion over who will pay the biggest bribe.

SEC FINDS A DIAMOND PONZI SCHEME

It is easy to believe that over the front door of every trading house in America there is a bust of Charles Ponzi. It seems that there are Ponzi schemes everywhere. There are Ponzi schemes involving insurance, real estate, bonds, commodities and stocks. The following case involves generating cash payouts to clients using profits from trading in diamonds. In fact there does not appear to be any evidence of profitable trading going on at the firm. Instead, like in the Madoff case, the diamond traders were just cutting checks to old investors using the money from new investors. In this case, the SEC had to get a court order to freeze the assets of the owner and his company. The following is an excerpt from the SEC web page:

“Nov. 23 2010 — The Securities and Exchange Commission has obtained an emergency court order freezing the assets of a Colorado man and his company charged with running a Ponzi scheme with money invested for diamond trading.

The SEC alleges that Richard Dalton and Universal Consulting Resources LLC (UCR) raised approximately $17 million from investors in 13 states for two fraudulent offerings that were generally referred to as the “Trading Program” and the “Diamond Program.” Investors in both programs received monthly payments which Dalton told them were profits from successful trading. However, there is no evidence to substantiate the $10 million in claimed profits from the two programs, and the vast majority of funds that came into UCR bank accounts were from new investors instead of actual profit-generating activity. Dalton used money from new investors to fund the monthly payments to existing investors while continuing to recruit new investors in order to keep his scheme going. Meanwhile, Dalton stole investor funds to purchase a home and a vehicle and pay for his daughter’s wedding reception.
Investors often learned of Dalton through a friend or family member who had previously invested with him. These new investors placed great weight on the fact that someone they knew and trusted received regular monthly payments from Dalton. Some investors even invested funds from their self-directed IRA retirement accounts.
“Dalton made his Ponzi scheme falsely appear profitable by continuing to bring in new investor money,” said Donald Hoerl, Director of the SEC’s Denver Regional Office. “Investors should be skeptical when someone promises low risk and high guaranteed returns, and focus on the details of the investment being offered rather than the lure of profits paid to friends and family.”
According to the SEC’s complaint filed in U.S. District Court in Denver, Dalton told investors in UCR’s Trading Program that their money would be held safely in an escrow account at a bank in the United States, and that a European trader would use the value of that account — but not the actual funds — to obtain leveraged funds to purchase and sell bank notes. According to Dalton, the trading was profitable enough that he was able to guarantee returns of 4 to 5 percent per month — or 48 to 60 percent per year — to investors. Dalton claimed that he had successfully run the Trading Program for nine years.
According to the SEC’s complaint, UCR began offering the Diamond Program in early 2009. Dalton claimed the program would profit by using investor funds for diamond trading. Similar to the Trading Program, Dalton claimed that investor funds would be safely held in an escrow account. Under the Diamond program, Dalton enticed investors with a guaranteed 10 percent monthly return — or 120 percent annual return.
The SEC further alleges that Dalton, who had no other employment or legitimate source of income, funded his personal life at the expense of investors. Dalton spent or withdrew in excess of $250,000 from UCR accounts that held investor money and used those funds for personal expenses, including paying $5,000 for his daughter’s wedding reception and $38,000 to purchase a vehicle. Dalton also transferred more than $900,000 from another UCR account in order to purchase a home. The home was purchased solely in the name of his wife, Marie Dalton, in an attempt to protect it from creditors. The asset freeze obtained by the SEC extends to the assets of Dalton’s wife, who is named as a relief defendant.
The SEC’s complaint alleges that Dalton and UCR violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint names Marie Dalton as a relief defendant in the case in order to recover investor assets now in her possession. The SEC’s investigation is ongoing.”

It is a comment on how some investors think when they pick either super glamorous assets or really odd items to buy into with their hard earned dollars. Something glamorous like diamonds is hard to turn down as an investment because it seems obvious that you can’t loose money betting on diamonds which are sometimes as good as cash (better than cash in some countries). An example of an odd item that my uncle invested (lost) money in was a beach towel with a pillow sewn into it. It seemed like a great idea at the time and everyone encouraged him to keep pouring money into the pillow beach towel. My uncle had an overseas partner in the deal and that partner eventually disappeared and my uncle never heard from him again.

SEC PROPOSES CRACKDOWN ON NAKED ACCESS TO EXCHANGES

The following information was recently released on the SEC government web site. It is in regards to brokers allowing certain customers direct access to the exchanges without going through a broker/dealer.
Broker/dealers are subject to certain regulations when using the exchanges which customers do not have to follow. Unfiltered trades lead to trades which may be improper which can cause instability in the market.

“Washington, D.C., Jan. 13, 2010 — The Securities and Exchange Commission today voted unanimously to propose a new rule that would effectively prohibit broker-dealers from providing customers with "unfiltered" or "naked" access to an exchange or alternative trading system (ATS).
The SEC's proposed rule would require brokers with market access, including those who sponsor customers' access to an exchange, to put in place risk management controls and supervisory procedures. Among other things, the procedures would help prevent erroneous orders, ensure compliance with regulatory requirements, and enforce pre-set credit or capital thresholds.

"Unfiltered access is similar to giving your car keys to a friend who doesn't have a license and letting him drive unaccompanied," said SEC Chairman Mary L. Schapiro. "Today's proposal would require that if a broker-dealer is going to loan his keys, he must not only remain in the car, but he must also see to it that the person driving observes the rules before the car is ever put into drive."

Broker-dealers use a 'special pass' known as their market participant identifier (MPID) to electronically access an exchange or ATS and place an order for a customer. Broker-dealers are subject to the federal securities laws as well as the rules of the self-regulatory organizations that regulate their operation.

However, those laws and rules do not apply to a non-broker-dealer customer who a broker-dealer provides with their MPID in order to individually gain access to an exchange or ATS. Under this arrangement known as "direct market access" or "sponsored access," the customer can sometimes place an order that flows directly into the markets without first passing through the broker-dealer's systems and without being pre-screened by the broker-dealer in any manner. This type of direct market access arrangement is known as "unfiltered" access and "naked" access. A recent report estimated that naked access accounts for 38 percent of the daily volume for equities traded in the U.S. markets.

Through sponsored access, especially "unfiltered" or "naked" sponsored access arrangements, there is the potential that financial, regulatory and other risks associated with the placement of orders are not being appropriately managed. In particular, there is an increased likelihood that customers will enter erroneous orders as a result of computer malfunction or human error, fail to comply with various regulatory requirements, or breach a credit or capital limit.

The SEC's proposed rule would require broker-dealers to establish, document and maintain a system of risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory and other risks related to its market access, including access on behalf of sponsored customers.

Broker-dealers would be required to:
Create financial risk management controls reasonably designed to prevent the entry of orders that exceed appropriate pre-set credit or capital thresholds, or that appear to be erroneous.
Create regulatory risk management controls reasonably designed to ensure compliance with all regulatory requirements applicable in connection with market access.
Have financial and regulatory risk management controls applied automatically on a pre-trade basis before orders route to an exchange or ATS.
Maintain risk management controls and supervisory procedures under the direct and exclusive control of the broker-dealer with market access.
Establish, document and maintain a system for regularly reviewing the effectiveness of its risk management controls and for promptly addressing any issues.

The SEC today also approved a new Nasdaq rule that requires broker-dealers offering sponsored access to Nasdaq to establish certain controls over the financial and regulatory risks of that activity. The proposed Commission rule would extend beyond the new Nasdaq rule in several respects. For example, the Commission's proposal would require the broker-dealer to automatically apply its controls on a pre-trade basis, and to retain exclusive control over those controls without delegation of this critical function to the customer or another third party. The Commission's proposal also would require broker-dealers to establish a supervisory system, including an annual CEO certification, to assure the ongoing effectiveness of its controls In addition, the Commission's proposed risk management controls would apply market-wide, whenever a broker-dealer directly accesses any exchange or ATS.”

SEC CHARGED BANC OF AMERICA SECUITIES WITH SECURITIES FRAUD

The following is a breaking story which alleged that Banc of America Securities committed fraud in it’s dealings with municipal bonds. BAS was part of Bank of America and was merged with Merril Lynch when Bank of America took over that firm. The following excerpt from the SEC web page shows in detail the case which the SEC laid out against BAS:

"Washington, D.C., Dec. 7, 2010 — The Securities and Exchange Commission today charged Banc of America Securities, LLC (BAS) with securities fraud for its part in an effort to rig bids in connection with the investment of proceeds of municipal securities.

To settle the SEC's charges, BAS has agreed to pay more than $36 million in disgorgement and interest. In addition, BAS and its affiliates have agreed to pay another $101 million to other federal and state authorities for its conduct.
"This ongoing investigation has helped to expose wide-spread corruption in the municipal reinvestment industry," said Robert Khuzami, Director of the SEC's Division of Enforcement. "The conduct was egregious — in return for business, the company repeatedly paid undisclosed gratuitous payments and kickbacks and affirmatively misrepresented that the bidding process was proper."
When investors purchase municipal securities, the municipalities generally invest the proceeds temporarily in reinvestment products before the money is used for the intended purposes. Under relevant IRS regulations, the proceeds of tax-exempt municipal securities must generally be invested at fair market value. The most common way of establishing fair market value is through a competitive bidding process, whereby bidding agents search for the appropriate investment vehicle for a municipality.
In its Order, the SEC found that the bidding process was not competitive because it was tainted by undisclosed consultations, agreements, or payments and, therefore, could not be used to establish the fair market value of the reinvestment instruments. As a result, these improper bidding practices affected the prices of the reinvestment products and jeopardized the tax-exempt status of the underlying municipal securities, the principal amounts of which totaled billions of dollars.
According to the Commission's Order, certain bidding agents steered business from municipalities to BAS through a variety of mechanisms. In some cases, the agents gave BAS information on competing bids (last looks), and deliberately obtained off-market "courtesy" bids or purposefully non-winning bids so that BAS could win the transaction (set-ups). As a result, BAS won the bids for 88 affected reinvestment instruments, such as guaranteed investment contracts (GICs), repurchase agreements (Repos) and forward purchase agreements (FPAs).
In return, BAS steered business to those bidding agents and submitted courtesy and purposefully non-winning bids upon request. In addition, those bidding agents were at times rewarded with, among other things, undisclosed gratuitous payments and kickbacks. The Commission also found that former officers of BAS participated in, and condoned, these improper bidding practices.
BAS is now known as Merrill Lynch, Pierce, Fenner & Smith Incorporated following a merger.
Elaine C. Greenberg, Chief of the SEC's Municipal Securities and Public Pensions Unit, added "This conduct threatened the integrity of the municipal marketplace, affecting not only the municipal issuers who were directly defrauded, but also the thousands of investors nationwide who purchased their tax-exempt municipal securities."
Without admitting or denying the SEC's findings, BAS consented to the entry of a Commission Order which censures BAS, requires it to cease-and-desist from committing or causing any violations and any future violations of Section 15(c)(1)(A) of the Exchange Act of 1934, and to pay disgorgement plus prejudgment interest totaling $36,096,442 directly to the affected entities.
In determining to accept BAS' offer, which does not include the imposition of a civil penalty, the Commission considered the cooperation of and remedial actions undertaken by BAS in connection with the Commission's investigation as well as investigations conducted by other law enforcement agencies. Among other things, BAS self-reported the bidding practices to the Antitrust Division of the Department of Justice.
In a related action, the Commission barred Douglas Lee Campbell, a former officer of BAS, from association with any broker, dealer or investment adviser, based upon his guilty plea to a criminal information on Sept. 9, 2010, in United States v. Douglas Lee Campbell (Criminal Action No. 10-cr-803) charging him with two counts of conspiracy and one count of wire fraud. The criminal information charged, among other things, that Campbell engaged in fraudulent misconduct in connection with the competitive bidding process involving the investment of proceeds of tax-exempt municipal bonds. The Commission is not imposing a civil penalty against Campbell based on his cooperation in the Commission's investigation.

Deputy Chief Mark R. Zehner and Assistant Municipal Securities Counsel Denise D. Colliers of the SEC's Municipal Securities and Public Pensions Unit conducted the investigation out of the agency's Philadelphia Regional Office under the leadership of Unit Chief Elaine C. Greenberg, Regional Director Daniel M. Hawke and Assistant Regional Director Mary P. Hansen.
The SEC thanks the Antitrust Division of the Department of Justice and the Federal Bureau of Investigation for their cooperation and assistance in this matter. The SEC is bringing this action in coordination with the Internal Revenue Service, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and 20 State Attorney Generals.
The SEC's investigation is continuing."

The above is an ongoing story and it may be possible that several other
institutions might be involved in similar schemes. Maybe other institutions should be feeling nervous with the SEC's current dedication to giving the corpses of financial institutions very detailed autopsies.

OIL SERVICE, FREIGHT COS. PAY FINES FOR ALLEGED BRIBES

The following excerpt from the SEC web site detaisl the settlement by several companies accused of bribing foreign officials:

"SEC Charges Seven Oil Services and Freight Forwarding Companies for Widespread Bribery of Customs Officials
FOR IMMEDIATE RELEASE
2010-214
Washington, D.C., Nov. 4, 2010 — The Securities and Exchange Commission today announced sweeping settlements with global freight forwarding company Panalpina, Inc. and six other companies in the oil services industry that violated the Foreign Corrupt Practices Act (FCPA) by paying millions of dollars in bribes to foreign officials to receive preferential treatment and improper benefits during the customs process.

SEC Complaints:
Panalpina, Inc.
Pride International, Inc.
Tidewater Inc.
Transocean, Inc.
GlobalSantaFe Corp.
Noble Corporation
SEC Administrative Proceeding:
Royal Dutch Shell plc

The SEC alleges that the companies bribed customs officials in more than 10 countries in exchange for such perks as avoiding applicable customs duties on imported goods, expediting the importation of goods and equipment, extending drilling contracts, and lowering tax assessments. The companies also paid bribes to obtain false documentation related to temporary import permits for oil drilling rigs, and enable the release of drilling rigs and other equipment from customs officials.

The SEC's cases were coordinated with the U.S. Department of Justice's Fraud Section, and the sanctions to be paid by the companies under the settlements total $236.5 million. This is the first sweep of a particular industrial sector in order to crack down on public companies and third parties who are paying bribes abroad.

"Bribing customs officials is not only illegal but also bad for business, as the coordinated efforts of law enforcement increase the risk of detection every day," said Robert Khuzami, Director of the SEC's Division of Enforcement. "These companies resorted to lucrative arrangements behind the scenes to obtain phony paperwork and special favors, and they landed themselves squarely in investigators' crosshairs."

Cheryl J. Scarboro, Chief of the SEC's Foreign Corrupt Practices Act Unit, added, "This investigation was the culmination of proactive work by the SEC and DOJ after detecting widespread corruption in the oil services industry. The FCPA Unit will continue to focus on industry-wide sweeps, and no industry is immune from investigation."

Without admitting or denying the allegations, the companies agreed to settle the SEC's charges against them by paying approximately $80 million in disgorgement, interest, and penalties. The companies agreed to pay fines of $156.5 million to settle the criminal proceedings with DOJ.

SEC charges against six companies were filed in federal court, and one company was charged in an SEC administrative proceeding. Among the SEC's allegations:

Panalpina, Inc. — A U.S. subsidiary of the Swiss freight forwarding giant Panalpina World Transport (Holding) Ltd. (PWT), Panalpina is charged with paying bribes to customs officials around the world from 2002 to 2007 on behalf of its customers, some of whom are included in these settlements. Panalpina bribed customs officials in Nigeria, Angola, Brazil, Russia and Kazakhstan to enable importation of goods into those countries and the provision of logistics services. The bribes were often authorized by Panalpina's customers and then inaccurately described in customer invoices as "local processing" or "special intervention" or "special handling" fees.

Panalpina agreed to an injunction and will pay disgorgement of $11,329,369 in the SEC case.
PWT and Panalpina agreed to pay a criminal fine of $70.56 million.
Pride International, Inc. — One of the world's largest offshore drilling companies, Pride and its subsidiaries paid approximately $2 million to foreign officials in eight countries from 2001 to 2006 in exchange for various benefits related to oil services. For example, Pride's former country manager in Venezuela authorized bribes of approximately $384,000 to a state-owned oil company official to secure extensions of drilling contracts, and a French subsidiary of Pride paid $500,000 in bribes intended for a judge to influence customs litigation relating to the importation of a drilling rig.

Pride agreed to an injunction and will pay disgorgement and prejudgment interest of $23,529,718 in the SEC case.
Pride and subsidiary Pride Forasol agreed to pay a criminal fine of $32.625 million.
Tidewater Inc. — The New Orleans-based shipping company through a subsidiary reimbursed approximately $1.6 million to its customs broker in Nigeria from 2002 to 2007 so the broker could make improper payments to Nigerian customs officials and induce them to disregard regulatory requirements related to the importation of Tidewater's vessels.

Tidewater agreed to an injunction and will pay $8,104,362 in disgorgement and a $217,000 penalty.
Tidewater Marine International agreed to pay a criminal fine of $7.35 million.
Transocean, Inc. — An international provider of offshore drilling services to oil companies throughout the world, Transocean made illicit payments from at least 2002 to 2007 through its customs agents to Nigerian government officials in order to extend the temporary importation status of its drilling rigs. Bribes also were paid to obtain false paperwork associated with its drilling rigs and obtain inward clearance authorizations for its rigs and a bond registration.

Transocean agreed to an injunction and will pay disgorgement and prejudgment interest of $7,265,080.
Transocean Ltd. and Transocean Inc. agreed to pay a criminal fine of $13.44 million.
GlobalSantaFe Corp. (GSF) A provider of offshore drilling services GSF made illegal payments through its customs brokers from approximately 2002 to 2007 to officials of the Nigerian Customs Service (NCS) to secure documentation showing that its rigs had left Nigerian waters. The rigs had in fact never moved. GSF also made other payments to government officials in Gabon, Angola, and Equatorial Guinea.

GSF agreed to an injunction and will pay disgorgement of $3,758,165 and a penalty of $2.1 million.
Noble Corporation — An offshore drilling services provider, Noble authorized payments by its Nigerian subsidiary to its custom agent to obtain false documentation from NCS officials to show export and re-import of its drilling rigs into Nigerian waters. From 2003 to 2007, Noble obtained eight temporary import permits with false documentation.

Noble agreed to an injunction and will pay disgorgement and prejudgment interest of $5,576,998.
Noble agreed to pay a criminal fine of $2.59 million.
Royal Dutch Shell plc — An oil company headquartered in the Netherlands, Shell and its indirect subsidiary called Shell International Exploration and Production, Inc. (SIEP) violated the FCPA by using a customs broker to make payments from 2002 to 2005 to officials at NCS to obtain preferential customs treatment related to a project in Nigeria.

SIEP and Shell agreed to a cease-and-desist order and will pay disgorgement and prejudgment interest of $18,149,459.
Shell Nigerian Exploration and Production Co. Ltd. will pay a criminal fine of $30 million. "

It should be noted that the SEC acknowledged that the Department of Justice and the FBI helped with the investigation.

The bribing of government officials and politicians is a problem in many countries of the world including the United States. It is hard to say whether the people in government or the people in business should be given the worse punishments. In America prosecuting for giving or receiving bribes in this country is rare because so many laws have been passed and court cases decided which pretty much legalizes bribery. Our politicians might be corrupt but they are not stupid. Bribery is looked upon as a victimless crime in the United States.

Of course the victims of bribery are obvious. First of all the citizens do not have a government operating in their best interest. Secondly, businesses that give bribes undermine the businesses of honest entrepreneurs who refuse to give payola to people in government. Bribery simply undermines the workings of capitalism and should simply be treated as a crime.

FDIC CHAIRMAN CALLS FOR ACCOUNTABILITY

Although the FDIC (Federal Deposit Insurance Corporation) is theoretically geared more to the banking system than the SEC (Security and Exchange Commission) the businesses of banking and securitization has been merged within many institutions over the last couple of decades. In short, what affects the securities industry affects the banking industry and vice verse. The following excerpt from the FDIC web page are remarks given by FDIC Chairman Sheila Bair to the Boston Club:



"Remarks by FDIC Chairman Sheila C. Bair to The Boston Club, Boston, MA
December 2, 2010
Thank you for that kind introduction. It is wonderful to be back in Massachusetts and an honor to talk to this distinguished group.

The past few years have been the most eventful for U.S. economic policy since the 1930s. And that, of course, is because our nation has suffered its most serious economic setback since the Great Depression. We knew that the crisis posed a grave threat to the U.S. economy. Our response has been historic in scope, and it has sparked a sorely needed debate over the appropriate roles for government and business in regulating and leading the economy.

What I would like to do this morning is outline the rationale for the new reforms, and explain how they intersect with the fundamental need for much greater responsibility and accountability on the part of government and corporate leaders. The following are remarks given by

Warren Buffett has said: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”

What we need are leaders who are willing to do things differently; leaders who are willing to do the hard work necessary to move our country forward. Leaders who aren’t interested in promoting their short term personal gains, but rather want to build their organizations for the long term for the benefit of this and future generations.

Accountability and responsibility

The financial crisis has revealed critical flaws in how our financial system operated and was regulated, as well as in our leadership culture. If there is an overarching theme of this crisis, it is a lack of accountability by managers, by regulators, by lenders, by borrowers -- by everyone. We see that at the failed banks – both large ones that the government bailed-out and smaller ones the FDIC has had to resolve.

We’ve seen disengaged managers; managers who were not hands-on, who would not take responsibility or find out what was going on inside of their organization. We’ve seen managers who didn’t look beyond their next quarter’s financial statements and who rewarded short term profit generation through high risk activities which sowed the seeds of their ultimate demise. They didn't do their homework, they didn't understand the risks their companies were taking, and they didn't work hard enough. Some were arrogant.

It's an important lesson for investors, shareholders and, of course boards, who ultimately are responsible for hiring the CEO, and making sure that the CEO and other senior managers are up to the job, and doing their job. At larger institutions, some managers assumed that their size protected them from regulatory or market sanctions – that they were so systemically important and interconnected that they were Too Big To Fail. And some of them proved to be right. Especially at the height of the financial crisis, we saw these large, systemically important institutions exempted from the type of supervisory sanctions that community banks face every day.

That is one of the reasons why we fought so hard to end Too Big To Fail. We now have a resolution process that will impose discipline on large institutions as well as the smaller ones. If they get into trouble, there will be accountability. There will be consequences for management, for corporate boards, for investors, and for creditors.

Too Big To Fail & Resolution Authority

The new Dodd-Frank financial reform act establishes a credible resolution authority for giant banks and non-bank financial institutions. It gives the FDIC, for the first time, a set of receivership powers to close and liquidate systemically-important financial firms that are failing. These new powers are similar to the existing FDIC receivership process for insured banks and thrifts.

Let me briefly describe the practical significance of these new powers. In the old world of Too Big To Fail, risk taking was subsidized. Systemically-important companies took on too much risk because the gains were private while the losses were socialized. Market discipline failed to rein in the excesses at these institutions because equity and debt holders -- who should rightly be at risk if things go wrong -- enjoyed an implicit government backstop.

This skewing of financial incentives inevitably led to a misallocation of capital and credit flows, which ultimately was harmful to the broader public good, as we have seen with the recent devastating losses of livelihoods, homes, and life savings. It was these poor incentives in place under Too Big To Fail that helped push risk out into the so-called shadow banking system, where regulation was the lightest. That’s where you saw most of the excesses in subprime and nontraditional mortgage lending, as well as holdings of mortgage-related derivative instruments.

So implementing the new resolution authority and ending Too Big To Fail is a game changer. It corrects the economic incentives, and protects the broader public good:


Market discipline will be restored,
Financial incentives will be better aligned,
Capital and credit will be allocated more efficiently, and
Taxpayers will no longer be on the hook when financial companies get it wrong.

Executive compensation

Another example of lack of accountability can be found in the misaligned compensation incentives, which were among the root causes of the financial crisis. Compensation was too-often based on deal volume or current earnings, and not enough attention was paid to risks that eventually caused problems down the road.

It is not appropriate for regulators to set or limit compensation. But it is very appropriate to undertake regulatory initiatives that encourage companies to structure compensation so that excessive risk taking is discouraged, long term profitability is rewarded, and most importantly, that meaningful financial penalties are imposed on employees whose risk taking ends up causing losses later on.

Fiscal responsibility

In Washington, we also need more accountability for our increasingly dire fiscal situation. We must mend our ways if we are to preserve financial stability in the years ahead. Excessive government borrowing poses a clear danger to our long-term financial stability, and assuaging it requires fiscal responsibility and leadership. Total U.S. public debt has doubled in just the past seven years to almost $14 trillion, or more than $100,000 for every U.S. household.

This explosive growth in federal borrowing is not only the result of the financial crisis, but also the unwillingness of our government over many years to make the hard choices necessary to rein in our long-term structural deficit. If it is not checked soon, this borrowing will at some point directly threaten financial stability by undermining the confidence that investors have in U.S. government obligations.

Actually fixing these problems will require a bipartisan national commitment to a comprehensive package of spending cuts and tax increases over many years. The plan released yesterday by the National Commission on Fiscal Responsibility and Reform offers such a plan. It proposes a combination of spending cuts, revenue-enhancing tax reforms, and cost containment in health care and entitlement programs that would produce nearly $4 trillion in deficit reduction over the next ten years.

While opinions differ as to exactly what combination of spending cuts and revenue increase will be necessary we can be sure that most of the needed changes will be unpopular, and will likely affect every interest group in some way or another. We will want to phase in these changes over time as the economy continues to recover from the effects of the financial crisis.

But only with a comprehensive package can we truly achieve the long-term budget discipline needed to preserve our nation’s credibility in global financial markets, and maintain a stable banking system to support the real economy. We must look beyond our narrow partisan interests, and show the world that we are prepared to act boldly to secure our economic future.

Leadership

I am very proud of the stability that the FDIC has provided throughout the crisis. No one lost a penny of insured deposits. And in fact, no one has ever lost a penny of insured deposits in the 77 years since the FDIC was created in 1933. As the crisis unfolded and other financial sectors were destabilizing, insured deposits remained stable and there were no disruptions.

As the leader of an organization, I always try to keep a focus on mission. Protecting insured deposits is a very important, tangible mission. It's one that the public understands and appreciates.

If you look at other organizations – whether private or public -- that have high morale, they have a clearly defined mission. The leadership at those organizations has to ensure that people stay focused on the mission and help them understand how their individual jobs relate to the mission. You need accountability. You need responsibility. You need people to take ownership of their jobs and connect that to the organization’s broader mission.

One challenge I have is to tell our people how good they are. That their judgment is as good as that of the banks they are examining, and that it is their job to speak up about any concerns they have. That they have the right and the obligation to question and tell a bank’s management about those concerns, whether they're not reserving enough against their loans, or that they're moving into a new line of business or a new geographic area in which they are unfamiliar.

Conclusion

We all know there are no easy shortcuts to rebuilding our financial infrastructure and reining in our long-term structural deficit. And it is always appealing to try to go back to old and familiar ways. But in American finance, those are the practices that pushed our economy to the brink of ruin.

Instead, we must move forward, make the tough choices, and accept that preserving stability is a prerequisite to making the financial system more efficient and more profitable. In the end, leadership means showing the resolve to identify emerging risks and taking concerted action to head them off.

In concluding, I don’t want to leave you with the impression that all leadership in the financial sector should be faulted. There are several examples of senior management at financial institutions, large and small, who avoided the excessive risk taking that led to the crisis. So let us celebrate those who led their organizations effectively and resolve to foster a culture which rewards managers who are willing to forego short term profits in favor of long term stability and prosperity.

And as part of building that culture, let’s hope that we see a lot more women in the upper echelons of financial institution management, including – at long last – at the very top.

Thank you."

The FDIC believes there has to be reform in order to improve our overall economy. With reforms supported by the FDIC along with legal sanctions taken by the SEC perhaps we might have a light at the end of this long dark tunnel our economy in which our economy has been stuck. We can only hope someone sprays for poisonous spiders before financial oversight authorities signal that it is O.K. to move through the tunnel to the light.