In the Matter of Fifth Third Bancorp, et al. Admin. Proc. File No. 3-15635
Oct. 6, 2022
On December 4, 2013, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Fifth Third Bancorp (“Fifth Third”) and Daniel Poston (“Poston”) (collectively, the “Respondents”). In the Order, the Commission found that, in the third quarter of 2008, Fifth Third violated the federal securities laws when it failed to record substantial losses during the financial crisis by not properly accounting for a portion of its commercial real estate loan portfolio. In his role as CFO, Poston failed to ensure that Fifth Third appropriately recorded its commercial real estate loans; certified that Fifth Third’s financial statements were prepared in accordance with GAAP; and made representations in a Fifth Third management representation letter to Fifth Third’s auditors regarding the company’s classification of commercial loans that were not true. The Commission ordered, and the Respondents have paid, a total of $6,600,000.00 in civil money penalties. The Commission ordered that such penalties will be held pending a decision whether the Commission will seek to distribute the funds, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, or transfer the funds to the U.S. Treasury. See the Commission’s Order: Release No. 33-9490.
On July 28, 2021, the Commission issued an order establishing a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so that the civil penalties paid can be distributed to investor victims. See the Commission’s Order: Release No. 34-92511.
On September 23, 2021, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund. See the Commission’s Order: Release No. 34-93110.
On December 29, 2021, the Commission issued an order appointing Guidehouse Inc., Baker & Hostetler LLP, and Pace Claim Services LLC (“GBP”), as the Fund Administrator to oversee the administration and distribution of the Fair Fund and, set the administrator’s bond amount. See the Commission’s Order: Release No. 34-93875.
On August 4, 2022, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The notice provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-95418 and the Proposed Plan.
The Proposed Plan provides that the distribution of the Fair Fund shall be made to those injured investors who were harmed by the Respondents’ failure to record substantial losses during the 2008 financial crisis by not properly accounting for a portion of its commercial real estate loan portfolio.
On October 6, 2022, the Commission issued an order approving the Proposed Plan and simultaneously posted the approved plan of distribution (the “Plan”). See the Commission’s Order: Release No. 34-95988 and the Plan.
For more information, please contact the Fund Administrator:
GBP / PACE Claims Services LLC
Telephone Number: 1-833-373-3535