‘Severe’ indictment for bank executives

by Justin da Rosa11 Aug 2015
Executives at a national trust company have been indicted for the part they played in the financial crisis.

“This certainly stands out,” Helen Bowers, head of the finance department at the University of Delaware told Delaware Online. “Even though the amount of money involved is small relative to other major banks in the financial crisis, the level of the executives indicted is high and these are severe indictments. That’s what’s so striking about it.”

Robert Harra Jr, former president of Wilmington Trust, and David Gibson, former chief financial officer, were indicted last week for allegedly waiving past-due loans and making false statements to federal agencies and the public.

A grand jury also indicted former Chief Credit Officer William North and former Controller Kevyn Rakowski.

The four received 19 indictments and are charged with conspiracy to commit fraud related to buying and selling securities, conspiracy to defraud the United States of America, and falsifying statements to regulators.

The bank could have hidden arrears in order to sell off mortgage-backed securities for higher values than they were worth.
No sentences have been given out and the four executives plan to fight the charges in court.

It’s a rare decision, considering very few banking professionals have been indicted for various roles played in the economic downturn.

Also of note is the fact that Wilmington Trust is a small player and no executives at the big banks have yet been indicted.
However, as one law professor notes, it may be easier to pursue legal action against smaller banks than it is the larger institutions.

“It may be easier to hold higher ups accountable in a case involving a smaller bank where there are fewer layers in the hierarchy,” Brandon Garrett, a law professor at the University of Virginia School of Law, told Delaware Online.


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