U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22786 / August 22, 2013
Accounting and Auditing Enforcement Release No. 3477 / August 22, 2013
Securities and Exchange Commission v. Thomas S. Wu, Ebrahim Shabudin, and Thomas T. Yu, Civil Action No. CV-11-4988 LB (N.D. Cal. Filed Oct. 11, 2011)
SEC Settles Claims Against Ebrahim Shabudin Arising from Understated Bank Losses During Financial Crisis
On August 8, 2013, the United States District Court for the Northern District of California approved a settlement of the Securities and Exchange Commission’s claims against Ebrahim Shabudin, the former Chief Operating Officer of UCBH Holdings, Inc. The case against Mr. Shabudin and two other defendants involves fraudulent financial reporting for UCBH Holdings, Inc., the publicly-traded holding company for San Francisco-based United Commercial Bank. The Commission alleges Mr. Shabudin and other defendants concealed losses on loans and other assets from the bank’s auditors and delayed the proper reporting of those losses. The Commission’s complaint alleges Mr. Shabudin committed securities fraud by making false and misleading statements in connection with the 2008 annual report and misleading the bank’s independent auditors, among other allegations.
Without admitting or denying the allegations, Mr. Shabudin agreed to pay a civil money penalty of $175,000, with the penalty partially reduced by the amount paid as a civil penalty in a related administrative action brought against him by the Federal Deposit Insurance Corporation.
Mr. Shabudin also consented to the entry of a final judgment that permanently enjoins him from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-11 thereunder. The judgment also bars Mr. Shabudin from acting as an officer or director of a public company under the Exchange Act.
For additional information, see Litigation Release No. 22121 and Accounting and Auditing Enforcement Release No. 3327 (October 11, 2011).