Former bank CEO/Chairman pays $85K CMP

The FDIC has issued an Order for Assessment of Civil Money Penalty, Removal and Prohibition to Larry B. Faigin, after a hearing before an Administrative Law Judge (ALJ), based on findings that Faigin participated in a series of unsafe and unsound banking practices and breached his fiduciary duty to the First Bank of Beverly Hills, Calabasas, California.

The FDIC alleged, and the ALJ agreed, that Faigin

• led the Bank to enter a new, riskier lending area—known as acquisition, development, and construction ("ADC") lending—without ensuring the Bank had the appropriate policies and staff in place to navigate this type of lending;
• led the Bank to purchase $117.1 million in eight, complex ADC participation loans absent proper underwriting; and
• despite the Bank's increasing risk profile, allowed the Bank to originate four more large, complex ADC loans ("Origination Loans") without proper underwriting.