FIRST CHOICE BANK, ILLINOIS, WAS CLOSED TODAY; FDIC NAMED AS RECEIVER

The following is an excerpt from the FDIC website: “First Choice Bank, Geneva, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation—Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Inland Bank & Trust, Oak Brook, Illinois, to assume all of the deposits of First Choice Bank. The sole branch of First Choice Bank will reopen on Saturday as a branch of Inland Bank & Trust. Depositors of First Choice Bank will automatically become depositors of Inland Bank & Trust. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of First Choice Bank should continue to use their existing branch until they receive notice from Inland Bank & Trust that it has completed systems changes to allow other Inland Bank & Trust branches to process their accounts as well. This evening and over the weekend, depositors of First Choice Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of June 30, 2011, First Choice Bank had approximately $141.0 million in total assets and $137.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Inland Bank & Trust agreed to purchase essentially all of the assets. . The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.0 million. Compared to other alternatives, Inland Bank & Trust's acquisition was the least costly resolution for the FDIC's DIF. First Choice Bank is the 68th FDIC-insured institution to fail in the nation this year, and the seventh in Illinois. The last FDIC-insured institution closed in the state was Bank of Shorewood, Shorewood, on August 5, 2011.”

THE OFFICE OF THE COMPTROLLER OF THE CURRENCY CLOSED A BANK IN PALM BEACH FLORIDA

The following excerpt is from the FDIC website: “Lydian Private Bank, Palm Beach, Florida, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Sabadell United Bank, National Association, Miami, Florida, to assume all of the deposits of Lydian Private Bank. The five branches of Lydian Private Bank will reopen on Monday as branches of Sabadell United Bank, National Association. Depositors of Lydian Private Bank will automatically become depositors of Sabadell United Bank, National Association. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Lydian Private Bank should continue to use their existing branch until they receive notice from Sabadell United Bank, National Association that it has completed systems changes to allow other Sabadell United Bank, National Association branches to process their accounts as well. This evening and over the weekend, depositors of Lydian Private Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of June 30, 2011, Lydian Private Bank had approximately $1.70 billion in total assets and $1.24 billion in total deposits. In addition to assuming all of the deposits of the failed bank, Sabadell United Bank, National Association agreed to purchase essentially all of the assets. The FDIC and Sabadell United Bank, National Association entered into a loss-share transaction on $907.1 million of Lydian Private Bank's assets. Sabadell United Bank, National Association will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $293.2 million. Compared to other alternatives, Sabadell United Bank, National Association's acquisition was the least costly resolution for the FDIC's DIF. Lydian Private Bank is the 66th FDIC-insured institution to fail in the nation this year, and the tenth in Florida. The last FDIC-insured institution closed in the state was Landmark Bank of Florida, Sarasota, on July 22, 2011.”

BASIC OUTLINE OF THE TREASURY'S WALL STREET REFORM GOALS

The following is an excerpt from the U.S. Treasury website. It is the basic outline of the Treasury's version of what the goals should be to reform Wall Street. "The financial crisis cost millions of jobs, erased more than $16 trillion in household wealth, and deeply scarred confidence in the integrity of the financial markets. The Dodd-Frank Wall Street Reform and Consumer Protection Act addresses key gaps and weaknesses in the system to help make future financial shocks less likely and less damaging. That’s critical because investors need confidence in the underlying safety, stability, and integrity of the financial system if they are going to put their capital to work financing new products, new businesses, and new jobs. The Dodd-Frank Act’s reforms are vital to restoring that trust and rebuilding a pro-growth, pro-investment financial system. It helps achieve those objectives by: Promoting a Safer, More Stable Financial System Focused on Sustainable Growth and Job Creation. Putting in Place a Dedicated Watchdog for Consumers. Bringing the Derivatives Market Out of the Darkness and Into the Light of Day. Providing New Tools for Winding Down Failing Firms Without Putting the Economy in Jeopardy.

FORMER CITIGROUP GLOBAL MAKETS LIMITED IN UK VP ORDERED TO PAY OVER $1.49 MILLION

The following is an excerpt from the CFTC website: "Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court default judgment order requiring Otmane El Rhazi to pay over $1.49 million in restitution and a civil monetary penalty for unlawful trading, misappropriation, and fraud. El Rhazi is a Moroccan national and a former futures and options trader and Vice President for Citigroup Global Markets Limited in the U.K. The order, entered on July 29, 2011 by Judge Denise Cote of the U.S. District Court for the Southern District of New York, requires El Rhazi to pay $373,860 in restitution and a $1,121,580 civil monetary penalty. The order also imposes permanent trading and registration bans against El Rhazi. The order stems from a CFTC complaint filed on April 15, 2011 (see CFTC Press Release 6025-11, April 18, 2011). The CFTC complaint charged El Rhazi with noncompetitive trading, fraud, and misappropriation from a Citibank, N.A. proprietary account for which he exercised trading authority as an employee of Citigroup Global Markets Limited. The court’s order finds that El Rhazi engaged in numerous noncompetitive and fictitious futures trades in order to steal money from a Citibank, N.A. proprietary account and pass the money to his personal account. Starting on November 23, 2010, El Rhazi engaged in a series of noncompetitive palladium and platinum futures transactions executed on the New York Mercantile Exchange’s Globex trading platform “in order to steal money from the Citi Account and pass the money to his own Personal Account,” according to the order. The effect of the transactions was that there was no net change in the open positions of either El Rhazi’s account or the Citibank, N.A. proprietary account. The order finds that as a result of the transactions, El Rhazi’s Personal Account profited and the Citibank, N.A. account cumulatively lost $373,860. The CFTC thanks the U.K. Financial Services Authority and the National Futures Association for their assistance."

PUBLIC SAVINGS BANK, HUNTINGDON VALEY PA., WAS CLOSED TODAY

The following is an e-mail press release from the FDIC website: “Public Savings Bank, Huntingdon Valley, Pennsylvania, was closed today by the Pennsylvania Department of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Capital Bank, National Association, Rockville, Maryland, to assume all of the deposits of Public Savings Bank. The sole branch of Public Savings Bank will reopen on Friday as a branch of Capital Bank, National Association. Depositors of Public Savings Bank will automatically become depositors of Capital Bank, National Association. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Public Savings Bank should continue to use their existing branch until they receive notice from Capital Bank, National Association that it has completed systems changes to allow other Capital Bank, National Association branches to process their accounts as well. This evening, Friday and over the weekend, depositors of Public Savings Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of June 30, 2011, Public Savings Bank had approximately $46.8 million in total assets and $45.8 million in total deposits. In addition to assuming all of the deposits of the failed bank, Capital Bank, National Association agreed to purchase essentially all of the assets. Customers with questions about today's transaction should call the FDIC toll-free at 1-800-523-8089. The phone number will be operational this evening until 9:00 p.m., Eastern Daylight Time (EDT); on Friday from 9:00 a.m. until 6 p.m., EDT; on Saturday from 9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m., EDT; and thereafter from 8:00 a.m. to 8:00 p.m., EDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/publicsvgs.html. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $11.0 million. Compared to other alternatives, Capital Bank, National Association's acquisition was the least costly resolution for the FDIC's DIF. Public Savings Bank is the 65th FDIC-insured institution to fail in the nation this year, and the first in Pennsylvania. The last FDIC-insured institution closed in the state was Earthstar Bank, Southampton, on December 10, 2010.”

SEC ALLEGES GIRLFRIEND’S INFO NETS CALIFORNIA MAN 3000 PROFIT IN DISNEY-MARVEL DEAL

The following excerpt is from the SEC website: Washington, D.C., Aug. 11, 2011 — The Securities and Exchange Commission today charged a California man with insider trading for a 3000 percent profit based on confidential information that he learned from his girlfriend prior to Walt Disney Company’s acquisition of Marvel Entertainment. The SEC alleges that Toby G. Scammell, who worked at an investment fund at the time, purchased highly speculative Marvel call options beginning in mid-August 2009. He secretly used money in his brother’s accounts over which he had been given control when his brother was deployed to serve in Iraq a few years earlier. Just before Scammell purchased many of the Marvel securities, he searched the Internet for such terms as “insider trading,” “material, non-public information,” and “Rule 10b-5.” According to the SEC’s complaint filed in U.S. District Court for the Central District of California, Scammell’s girlfriend worked on the Marvel acquisition as an extern in Disney’s corporate strategy department, and she possessed confidential details about the pricing and timing of the deal. Scammell illegally traded on this non-public information in breach of his duty of trust and confidence to his girlfriend. Marvel’s stock price jumped more than 25 percent after the Aug. 31, 2009, public announcement, and Scammell then sold all of his Marvel options. He didn’t reveal his trades or profits to his brother or his girlfriend. “Scammell exploited his romantic relationship for a financial windfall. His misuse of confidential information gave him an unfair and illegal edge over other traders in the markets,” said Rosalind R. Tyson, Director of the SEC’s Los Angeles Regional Office.‬‪ According to the SEC’s complaint, Scammell and his girlfriend often discussed her work projects at Disney. Scammell lived with his girlfriend in her Los Angeles apartment in late July 2009 when the Marvel deal heated up at Disney and his girlfriend was assigned to work on it. She explained to Scammell in an e-mail that she could not tell him the name of the company involved because of “confidentiality,” but she noted that “it’s very recognizable and nothing I’ve mentioned before.” According to the SEC’s complaint, Scammell and his girlfriend had multiple discussions about whether she should delay her business school applications so that she could write about the high-profile acquisition she was working on at Disney as part of her business school applications. She worked long hours on the Marvel acquisition — sometimes from home — in the five weeks leading up to the deal. She received detailed information about the anticipated acquisition including the $50 per share acquisition price. Scammell had access and the password to his girlfriend’s Blackberry on occasion. The SEC alleges that Scammell obtained the identity of the acquisition target from his girlfriend by overhearing one or more of her Marvel-related conversations, seeing electronic or paper documents in her possession related to the Marvel acquisition, or through his own work-related conversations with her. For instance, when Scammell’s girlfriend learned that the acquisition would be announced by Labor Day, she informed him the timing of the announcement would allow them to attend her friend’s wedding. It was around this time that Scammell began searching the Internet regarding call options. According to the SEC’s complaint, Scammell had never before traded in Marvel securities, and had only one previous experience trading call options that was unsuccessful. In the weeks leading up to the Disney-Marvel announcement, Scammell made several purchases totaling more than $5,400 in Marvel call options with remarkable strike prices of $50 and $45 even though Marvel had never traded above $41.74. Most of the Marvel options that Scammell purchased were set to expire on September 19, just weeks after the announcement. Scammell’s trades were so unusual that his purchase of options represented 100 percent of the market in many instances. After the public announcement that Marvel would be acquired by Disney, Scammell sold his Marvel options for a profit of more than $192,000 — a 3000 percent return in less than a month. The SEC’s complaint alleges that Scammell had limited personal funds at the time, so he secretly used his older brother’s money to buy the majority of the Marvel call options. Scammell had obtained trading authority over his brother’s account when he was deployed to serve in Iraq with the U.S. Army. Scammell never told his brother that he had invested his money in Marvel or that his brother’s account had increased by more than $100,000 in less than one month as a result of the Marvel trades. The SEC’s complaint alleges that Scammell, who now lives in Greenbrae, Calif., violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks a permanent injunction, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties. The SEC’s investigation was conducted by Teri M. Melson in the Los Angeles Regional Office, and the litigation effort will be led by Spencer E. Bendell. The SEC appreciates the assistance of the Options Regulatory Surveillance Authority. The SEC’s investigation is ongoing.‬‪ ‬‪‬‪