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."); Pepper v.
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.
class="font-size--16 MsoNormalThe CBK placed Chase Bank under the care of the Kenya Deposit Insurance Corporation in April, 2016 after the lender was forced to reclassify its Islamic banking assets as
insider loans. class="font-size--16 MsoNormalIn the end, this meant that Chase Bank had initially underreported its
insider loans which were actually Sh8 billion.
When CBK sought to sell Chase Bank in January 2017, it indicated that the bank was not in bad shape and that only a few
insider loans were the problem.
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.
Insider loans, loans provided to staff, had reached KES13.62bn and this was one of the reasons for its downfall.
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.
