Band Jonathan Stempel and Ismail Shakil
August 16 (Reuters) – A Maryland bank has agreed to pay about $22.9 million to settle charges brought by two US regulators for failing to disclose tens of millions of dollars in loans to family trusts owned by its former longtime chief executive .
Eagle Bancorp Inc EGBN.Oof Bethesda, Maryland, will pay $19.5 million in civil fines and more than $3.35 million in refunds and interest to settle with the Federal Reserve Board and the Securities and Exchange Commission (SEC), announced regulators on Tuesday.
Ronald Paul, 66, of Potomac, Maryland, an Eagle founder who served as CEO from 1997 until his retirement in 2019, agreed to pay approximately $521,000, of which $390,000 was civil penalties. The Fed permanently banned him from working in the banking sector.
Neither Eagle nor Paul admitted or denied wrongdoing.
Both were happy to put the case behind them, according to separate statements from Eagle CEO Susan Riel and Lance Wade, an attorney for Paul.
Wade also said the SEC’s consent order against Eagle included allegations about Paul that were “false, misleading, and unsupported by credible evidence,” and Paul would have disputed them had the SEC included them in its action against. him.
Regulators have accused Eagle of extending about $90 million in credit from 2015 to 2018 to entities that Paul owned or controlled, without disclosing it to investors in periodic reports and proxy statements.
The SEC also said that after short seller Aurelius Value in December 2017 questioned loans to Paul’s trusts, Eagle and Paul falsely assured investors that the loans were appropriate.
“Adequate disclosure of related party transactions is essential to enable investors to assess an issuer’s corporate governance,” Sanjay Wadhwa, deputy director of the SEC’s enforcement division, said in a statement. .
Eagle has 20 banking offices in Washington, DC and suburban Maryland and Virginia.
(Reporting by Jonathan Stempel in New York and Ismail Shakil in Ottawa; editing by Richard Pullin)
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