SEC Obtains Final Judgment Against Former Officers of Wilmington Trust
Litigation Release No. 24616 / September 25, 2019
Securities and Exchange Commission v. David R. Gibson, et al., No. 15-cv-00363 (D. Del. filed May 6, 2015)
On September 17, 2019, a federal district court in Wilmington, Delaware entered final judgments against David R. Gibson, the former Chief Financial Officer, and Kevyn Rakowski, the former Controller, of Wilmington Trust, a Delaware-based bank that was acquired by M&T Bank in 2011. The SEC previously charged Gibson, Rakowski, and two other defendants with fraud for intentionally excluding hundreds of millions of dollars of past due real estate loans from financial reports that Wilmington Trust filed. The SEC's complaint alleged that Gibson and Rakowski - who were both convicted in a criminal trial involving the same underlying facts alleged in the SEC's complaint, and who are appealing their convictions - made or substantially participated in making false or misleading disclosures of material facts concerning Wilmington Trust's loans which were 90 days or more past due.
The U.S. District Court for the District of Delaware entered consent judgments against both Gibson and Rakowski. The judgment against Gibson enjoins him from future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13a-14, and 13b2-1 thereunder, and further enjoins him from aiding and abetting future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. The judgment further orders Gibson to pay disgorgement of $50,000 and prejudgment interest of $20,367, for a total of $70,367, and prohibits him from serving as an officer or director of a public company.
The judgment against Rakowski enjoins her from future violations of Section 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder, and further enjoins her from aiding and abetting future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. The judgment further orders Rakowski to pay disgorgement of $37,316 and prejudgment interest of $6,719, for a total of $44,035.
The SEC's litigation against the remaining defendants, Robert V.A. Harra, and William B. North, is pending and is being led by Margaret Spillane, Jack Kaufman and Thomas P. Smith, Jr., and is being supervised by Sanjay Wadhwa.