Orion Bank Ordered By Fed To Toss Top Managers, Boost Capital
WASHINGTON -(Dow Jones)- Orion Bank must toss out its top managers and take
immediate action to boost its capital, including being bought by or merging with
another federally insured bank, federal regulators announced Friday.
Naples, Fl.-based Orion Bank is "critically undercapitalized," the Federal
Reserve Board of Governors said in an order calling for the bank to take prompt
corrective action. Regulators ordered the bank to dismiss its chief executive,
its president, the chairman of its board, and one of its board members.
Authorities claim that the bank lent about $60 million this June to straw
borrowers who used $15 million to buy common and preferred stock issued by the
bank's parent. The stock purchases came at a time when the bank had been
ordered to raise additional capital.
Orion, one of the largest privately held banks in southwest Florida, has been
the subject of several cease-and-desist orders. The latest enforcement action
calls for it to increase its capital no later than Nov. 20, and restricts its
ability to pay dividends or offer above-market interest rates.
-By Judith Burns, Dow Jones Newswires, 202-862-6692; Judith.Burns@dowjones.com
(END) Dow Jones Newswires
11-13-091645ET
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