{"id":82327,"date":"2022-08-17T02:04:44","date_gmt":"2022-08-17T06:04:44","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=82327"},"modified":"2022-08-17T02:04:44","modified_gmt":"2022-08-17T06:04:44","slug":"sec-charges-eagle-bancorp-and-former-ceo-with-failing-to-disclose-90-million-in-party-loans","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/08\/2022\/sec-charges-eagle-bancorp-and-former-ceo-with-failing-to-disclose-90-million-in-party-loans.html","title":{"rendered":"SEC Charges Eagle Bancorp and Former CEO with Failing to Disclose $90 Million in Party Loans"},"content":{"rendered":"\n<p>(HedgeCo.Net) The Securities and Exchange Commission has charged <strong>Eagle Bancorp, Inc<\/strong>., based in Bethesda, Maryland, and its former Chief Executive Officer and Chairman of the Board, Ronald D. Paul, with negligently making false and misleading statements about related party loans extended by the bank to Paul\u2019s family trusts. Eagle and Paul have agreed to settle the SEC\u2019s charges.<\/p>\n\n\n\n<p>The SEC\u2019s order against Eagle finds that, from March 2015 through April 2018, Eagle failed to include loans to Paul\u2019s family trusts totaling at times nearly <strong>$90 million<\/strong> in the related party loan balances included in its annual reports and proxy statements. The SEC\u2019s order also finds that Eagle improperly omitted tens of millions of dollars of loans to Eagle directors and their family members from these related party loan balances. Both SEC regulations and Generally Accepted Accounting Principles (GAAP) required Eagle to disclose these material related party transactions.<\/p>\n\n\n\n<p>The SEC\u2019s order also finds that, following a December 2017 short seller\u2019s report asserting Eagle had made significant undisclosed loans to Paul\u2019s family trusts, Eagle and Paul falsely stated in press releases, news articles, and meetings with investors that the trust loans were not related party loans and that Eagle was in compliance with all related party loan requirements. The SEC\u2019s order finds that even though Eagle\u2019s independent auditor and primary regulator concluded that the trusts were related parties under GAAP and banking regulations, respectively, Eagle again failed to disclose the trust loans as related party loans in its 2017 annual report.<\/p>\n\n\n\n<p>\u201cAdequate disclosures of related party transactions are essential to enable investors to evaluate an issuer\u2019s corporate governance,\u201d said Sanjay Wadhwa, Deputy Director of the SEC\u2019s Enforcement Division. \u201cHere, faced with a short seller\u2019s report alleging undisclosed related party loans by the bank, both Eagle and Paul failed to respond truthfully and accurately.\u201d<\/p>\n\n\n\n<p>The SEC\u2019s order finds that Eagle violated the negligence-based anti-fraud, proxy, reporting, books and records, and internal accounting controls provisions of the federal securities laws. Without admitting or denying the SEC\u2019s findings, Eagle agreed to cease and desist from future violations and to pay disgorgement of <strong>$2.6 million,<\/strong> prejudgment interest of $750,493, and a civil penalty of <strong>$10 million.<\/strong><\/p>\n\n\n\n<p>The SEC\u2019s complaint against Paul, filed in the Southern District of New York, charges him with violating the negligence-based antifraud and proxy provisions and making false certifications. Without admitting or denying the SEC\u2019s allegations, Paul has agreed to a permanent injunction, to a two-year officer and director bar, and to pay disgorgement of $109,000, prejudgment interest of $22,216, and a penalty of $300,000. The settlement is subject to court approval.<\/p>\n\n\n\n<p>In a parallel action, the Federal Reserve Board today announced settled enforcement actions against EagleBank and Paul.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(HedgeCo.Net) The Securities and Exchange Commission has charged Eagle Bancorp, Inc., based in Bethesda, Maryland, and its former Chief Executive Officer and Chairman of the Board, Ronald D. Paul, with negligently making false and misleading statements about related party loans [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048,16047],"tags":[],"class_list":["post-82327","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/82327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=82327"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/82327\/revisions"}],"predecessor-version":[{"id":82328,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/82327\/revisions\/82328"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=82327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=82327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=82327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}