Home Banking Eagle Bancorp in settlement talks with SEC, Fed as CFO faces penalty

Eagle Bancorp in settlement talks with SEC, Fed as CFO faces penalty

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The Securities and Trade Fee has despatched a discover to Eagle Bancorp Chief Monetary Officer Charles Levingston signaling that it’s planning to convey enforcement actions in opposition to him.

The so-called Wells discover comes because the $11 billion-asset Bethesda, Maryland, firm is nearing a settlement with the SEC and the Federal Reserve to resolve investigations first disclosed two years in the past into the corporate’s ties to former District of Columbia Councilman Jack Evans.

Evans was accused of a number of ethics violations in 2019, partly for his dealings with Eagle Bancorp and its former CEO and co-founder Ron Paul. Evans was allegedly employed as a marketing consultant by the financial institution and pushed local legislation that might transfer the district’s funds into native banks like Eagle, whereas he owned shares within the firm.

There have been additionally ethics concerns raised with Evans’s former function as chairman of the board on the Washington Metropolitan Space Transit Authority, which was allegedly a buyer of Eagle’s on the time.

Paul stepped down from his put up on the helm of Eagle in 2019 citing “severe well being developments.”

The SEC and Fed investigations have targeted on the financial institution’s “identification, classification and disclosure of associated social gathering transactions” together with the retirement of former officers and administrators.

Levingston has been Eagle’s CFO since 2017 and can stay in his function as he cooperates with the SEC’s investigation, CEO Susan Riel stated on a name with analysts Thursday.

“Whereas we will’t touch upon the allegations in opposition to Charles, I wish to stress that in making the choice to have Charles proceed to function CFO, the board evaluated the circumstances, thought-about a variety of elements, and consulted with members of administration and exterior advisors, together with our impartial auditors,” Riel stated.

Eagle reached a settlement in April to pay $7.5 million to non-public shareholders who introduced a class-action go well with in opposition to the corporate over allegations that it made deceptive statements about its inside controls and associated loans below the earlier administration.

Eagle hopes to resolve the SEC’s investigation “inside the subsequent few months,” Riel stated.

Eagle’s authorized bills, that are categorized together with “accounting {and professional} charges” have come down as the corporate is placing the authorized troubles behind it. These bills totaled $6.5 million within the first six months of the 12 months, down from almost $11 million throughout the identical interval final 12 months.

The corporate’s web earnings throughout the second quarter was $47.9 million, down 7.7% 12 months over 12 months. Eagle was in a position to launch $4.7 million from its loan-loss reserves and booked $4.7 million in accelerated curiosity income from its sale of a batch of Paycheck Safety Program loans throughout the interval.

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