For example, if an insider makes a loan to an undercapitalized corporation, the combination of undercapitalization and the insider loan
may allow the bankruptcy court to recharacterize the loan as a capital contribution, or to equitably subordinate the loan to the claims of other creditors.
It was a breach of fiduciary duty, conflict of interest, unsafe and unsound practice, and violation of law, for Respondent to: fail to remove himself from approving the Raintree loan made to a family member; administer the loan while acting as trustee for its collateral; and fail to disclose his interest in the insider loan
to the Bank and to OCC examiners.
There was only one |$90,000~ loan that we considered to be an insider loan
," Humphries says.
The credit union failed as a result of insider loan
fraud, for which a former vice president and his wife were found guilty.
However, generally speaking, he said insider loan
reviews are a normal part of the NCUA exam process.
The IUOE said it reached the conclusion after conducting research into the insider loan
activity of the three principal banking subsidiaries of Bank of Florida Corporation.
Chase Bank collapsed in 2016 on the day it published its restated financial results that showed it had under-reported insider loans
by Sh8 billion.
Ms Rozhkova said that it was beyond the mandate of E&Y to analyze PrivatBanks insider loans
when preparing an audit report on the banks financial statements for 2016.
, loans provided to staff, had reached KES13.
The credit union's policy required that any loans be approved by two board members, and that any insider loans
to an employee or board members be approved by the full board of directors.
It said Spagnoletti found evidence of insider loans
for overvalued properties, big money mortgages supported by collateral that did not exist, and payments for services never rendered.
The Insider Loans
and the related issuance of Bonus Shares constitute a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions.