Regions Financial bad loans probe widens-WSJ

Mon Dec 24, 2012 10:52am EST

Dec 24 (Reuters) - Federal agencies are examining allegations that Regions Financial Corp improperly classified loans that went bad during the financial crisis, the Wall Street Journal reported, citing depositions filed as part of a civil lawsuit against the large southeastern U.S. bank.

Regions said in August that it received inquiries and subpoenas from government authorities, primarily about accounting matters from 2009 and earlier, and that its board was investigating into the matter. ()

The inquiries about Regions Financial include subpoenas from the U.S. Securities and Exchange Commission, Regions Chief Financial Officer David Turner said in a July 20 deposition, the Journal reported on Sunday.

The depositions emerged as part of a lawsuit brought in 2010 by a pension fund investor, who alleged that senior Regions executives violated federal securities laws by misrepresenting the bank's financial condition in 2008 and 2009.

Turner, the only current officer named in any of the depositions unsealed earlier this month, also testified that Regions had received inquiries from the Justice Department, the daily reported.

A former executive William Teegarden, who testified on Sept. 17, said the Federal Reserve had questioned him about the bank's practices, WSJ reported. ()

Teegarden testified that he also answered additional questions from the Federal Bureau of Investigation, the Alabama Banking Commission and the Special Inspector General for the Troubled Asset Relief Program - the federal watchdog created to oversee the government's investments in troubled financial companies.

Teegarden, who worked in a special assets unit that determined which loans were most likely to default, told authorities that he knew of an attempt to delay the disclosure of $150 million in soured loans, WSJ reported.

Regions' representative was not immediately available for comment.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

Where do you want to go?

We look at when to take trips, budget considerations and the popularity of multigenerational family travel.   Video