Bank%20Probes%20Its%20Executives - Wall Street Journal...

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Wall Street Journal BUSINESS June 13, 2011 Bank Probes Its Executives by Dan Fitzpatrick Regions Financial's Board Investigates if Disclosure of Souring Loans Was Delayed The board of Regions Financial Corp. is investigating whether executives delayed public disclosure of loans that were going sour during the financial crisis, according to court documents and people familiar with the matter. The audit committee of the nation's 12th-largest U.S. bank by assets—and the only one of its size still supported by crisis- era government aid—began its probe after the Federal Reserve expressed concerns about past practices, these people said. Separately, Securities and Exchange Commission civil charges that Regions' investment-bank unit defrauded investors in subprime securities are likely to result in a settlement in which Regions pays about $200 million, said people familiar with the previously announced charges. A Regions spokesman declined to comment. When the charges were brought in 2010, a lawyer for the Regions unit called them "misdirected and factually inaccurate." The board review comes as regulators step up scrutiny of methods banks use to classify loans, which can make banks appear healthier than they are. Investigators are looking at so-called extend-and-pretend cases—where a bank gives a borrower more time and delays reclassifying a souring loan—as well as at "troubled-debt restructurings," where a bank breaks up a nonperforming loan and labels a portion of it as performing. What all these cases have in common is "a tendency not to want to report bad news," said Bert Ely, a longtime bank analyst based in Alexandria, Va. Regions, a fixture in the Southeast, is one of a handful of so-called super-regional banks that emerged from a consolidation
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This note was uploaded on 01/26/2012 for the course FIN 4620 taught by Professor Patriciarobertson during the Spring '12 term at Kennesaw.

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Bank%20Probes%20Its%20Executives - Wall Street Journal...

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