EagleBank fined $23M over improper lending, disclosure practices
A Maryland-based bank and bank holding company agreed to pay nearly $23 million in penalties for improperly loaning approximately $90 million to family trusts controlled by its former chief executive officer over three years, then misleading investors about the loans.
Eagle Bancorp, parent company of EagleBank, was fined $9.5 million by the Federal Reserve Board on Tuesday for violating the board’s insider lending regulation. The bank agreed to pay an additional $13.4 million to settle charges laid by Securities and Exchange Commission (SEC).
The SEC alleged EagleBank violated negligence-based antifraud, proxy, reporting, books and records, and internal accounting controls provisions of the federal securities laws when it did not disclose the existence of the loans to investors. When the bank’s improper lending practices were exposed by a short seller, it made false and misleading statements about the loans, the agency continued.