Federal banking regulators may be responsible for the wrongdoing of directors and officers of an institution placed in receivership, an Eastern District court has ruled, precipitating a split among Second Circuit jurisdictions.
Judge John Gleeson of the Eastern District, differing with a federal court in Connecticut, said that directors and officers sued by the Federal Deposit Insurance Corp. could raise, as an affirmative defense to allegations of negligence and breach of fiduciary duty, the FDIC’s responsibility to limit the losses of an institution of which it has become the receiver.
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