FDIC targets ex-Chicago Bears QB in bank suit
The federal government just tackled beloved former Chicago Bears quarterback Jim McMahon.
April 10, 2012 at 07:07 AM
2 minute read
The original version of this story was published on Law.com
The federal government just tackled beloved former Chicago Bears quarterback Jim McMahon.
Yesterday, the Chicago Sun-Times reported that the Federal Deposit Insurance Corp. (FDIC) has named McMahon in a lawsuit in which it seeks to recover $104 million in losses stemming from 17 bad loans that Broadway Bank made before the FDIC shut it down in April 2010. McMahon was a Broadway Bank board member from 2003 to 2008, when regulators began examining the bank's lending practices. The suit, which the government filed last month, also names six other former bank directors and two former executives.
The FDIC accuses the Broadway Bank board of being “grossly inattentive to the affairs of the bank—deferring excessively to the whims of the Giannoulias family,” which owned Broadway Bank. Alexi Giannoulias is the former Illinois state treasurer who unsuccessfully ran for President Obama's vacant Senate seat in 2010. As a result of the board's negligence, the FDIC says, “reports were not closely read, little or no due diligence into the bank's condition was done, regulatory criticisms were discounted, and, for defendant McMahon, important board meetings frequently were missed or ignored.”
According to court records, McMahon voted to approve one of the bad loans the bank approved, which netted a loss of $19.5 million.
In a statement, McMahon says the FDIC is unfairly blaming “Broadway's former officers and directors for not anticipating the same unprecedented market forces that also surprised central bankers, national banks, economists, major Wall Street firms and the regulators themselves.”
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