In the Matter of Wilmington Trust Corporation Admin. Proc. File No. 3-16098
Oct. 5, 2022
On September 11, 2014, the Commission instituted and simultaneously settled cease-and-desist proceedings (the “Order”) against Wilmington Trust Corporation (“WTC” or the “Bank”), a bank holding company based in Wilmington, Delaware. In the Order, the Commission found that WTC violated the federal securities laws by making false and misleading disclosures by concerning its accruing loans past due 90 days or more over multiple quarters during 2009 and 2010, its non-accruing loans in the third quarter of 2009, and its reserves for loan losses in the third and fourth quarters of 2009. The Commission found, among other things, that the Bank omitted almost $339 million in matured loans past due 90 days or more from its disclosures in its filings with the Commission for the third quarter of 2009; omitted over $330 million in matured loans past due 90 days or more from its disclosures in its filings for the year ended 2009; and incorporated its false and misleading Form 10-K for 2009 by reference in the offering materials for a February 2010 public offering in which the Bank sold $287 million of its common stock. The Commission ordered the WTC to pay disgorgement of $16,000,000 and prejudgment interest of $2,545,896.16 to the Commission. See the Commission’s Order: Release No. 33-9646.
The Distribution Fund consists of the $18,545,896.16 in disgorgement and prejudgment interest paid by WTC pursuant to the Order (the “Distribution Fund”). The Distribution Fund has been deposited in an interest-bearing account at the United States Treasury’s Bureau of Fiscal Service.
In a related forfeiture action, United States v. $44,000,000 in United States Currency, 17-cv-01416-RGA (D. Del.), in which the United States sought WTC’s forfeiture of all right, title, and interest in $44 million traceable to false statements made by WTC in securities and regulatory filings between the third quarter of 2009 and the second quarter of 2010, WTC defaulted, resulting in forfeiture of $44 million (the “Forfeited Funds”) to the Department of Justice (“DOJ”). DOJ has sent the Forfeited Funds, less the expenses incurred by the government in seizing those funds, to the Commission for inclusion in the Distribution Fund.
The Forfeited Funds have been added to the Distribution Fund for a total of $62,539,185.09.
On March 16, 2020, the Commission appointed Miller Kaplan Arase LLP, as the Tax Administrator of the Distribution Fund. See the Commission’s Order: Release No. 34-88395.
On April 30, 2020, the Commission issued an order appointing Epiq Class Action & Claims Solutions, Inc. as the Fund Administrator to oversee the administration and distribution of the Distribution Fund and, set the administrator’s bond amount. See the Commission’s Order: Release No. 34-88779.
On July 10, 2020, the Secretary, pursuant to delegated authority, published a notice of a proposed plan of distribution and opportunity for comment and simultaneously posted the Proposed Plan of Distribution (“Proposed Plan”). The notice provided the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-89287 and the Proposed Plan.
The Commission received no negative comments on the Proposed Plan during the 30-day comment period. On September 3, 2020, the Commission issued an order approving the Proposed Plan without modification and published the approved Plan of Distribution (the “Plan"). See the Commission's Order: Release No. 34-89758 and the Plan.
The Plan provides for the distribution of the Net Available Distribution Fund, comprised of $18,545,896.00 in disgorgement and prejudgment interest collected pursuant to the Order, $43,993,288.93 collected in a related forfeiture action, plus accrued interest and earnings, minus all taxes, investment fees, and fees and expenses of tax and fund administration, to investors who purchased Wilmington Trust Corporation common stock from January 18, 2008 through October 31, 2010, inclusive, and who suffered an eligible loss as calculated under the Plan.
On October 1, 2020, in a related district court action, SEC v. Gibson, et al., 15-cv-00363-RGA (D. Del.), in which the Commission pursued four former officers of WTC for their role in the conduct described in the Order, the district court entered a Stipulation and Proposed Order directing the combination of $114,703.72 collected and any future collections that the Commission may recover from the two remaining defendants in that action with the Distribution Fund for distribution in accordance with the Plan. See the Stipulation and Order.
On August 27, 2021, the Commission issued an order approving the disbursement of $62,504,575.28 from the Distribution Fund for distribution to eligible investors. See the Commission’s Order: Release No. 34-92779.
For more information, please contact the Fund Administrator:
Epiq Class Action & Claims Solutions, Inc.