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Voice your opinion about the FDIC decision banning execs

Tuesday, February 5th, 2013 | Posted by | 2 responses

Sonoma Valley Bank was the county’s only bank to collapse during the economic downtown. Recently, the Federal Deposit Insurance Corp. banned two of the former bank’s executives from the banking industry for “reckless, unsafe or unsound banking practices” and a “pattern of misconduct” that damaged the bank.

Lawsuits filed by shareholders and other investors say they lost roughly $70 million combined in the failure of the bank. The federal government lost at least $20 million in the bank’s collapse.

Regulatory laws provide a level of privacy that defies explanation for banning the banking executives. Is this practice fair?

Numerous Sonoma Valley residents were shaken by the bank’s collapse. Let us know how you feel about this latest development by voting in the new poll posted on the Sonoma Valley home page.

2 Comments for “Voice your opinion about the FDIC decision banning execs”

  1. Jail is too good for these thieves. Straw borrowers, straw buyers, buying access all under the watchful eye of complicit Directors who allowed executive compensation to be jack up to the stratosphere. What mojo did this borrower hold over these bankers ??? That’s the question.

  2. I still say the Board approved all these deals and the Regulators examined the bank every year leading up to the failure and they themselves failed to sound the alarm. Negligent and Complacent.

    It’s true the Federal Banking Agencies do not disclose examination data publically in an effort to protect the overall Safety & Soundness of the banking system and ensure confidence prevails.

    The Prohibition Orders listed Unsafe & Unsound practices, Breach of Fiduciary Duty, and Violations of Law. Melland’s also referenced the fact that he “personally benefitted.”

    So what do we know? We know the bank loaned millions out of area to Bijian Madjlessi and his affiliates as the Sonoma County Recorder records show this fact and the shell companies are registered on the Secretary of State to reveal ownership of these various Limited Liability Companies.

    We know Bijian Madjlessi was arrested on 4 felony counts of insurance fraud and booked in Marin County. A State led investigation felt they had enough clearcut evidence to move publically. This speaks to his character.

    We know Brian Melland the Loan Officer assigned to Madjlessi was involved with business ventures (Energy Drink company) with Madjlessi’s family and partners creating a conflict of interest.

    We know some of the loans were participated with Charter Oak Bank in Naapa from comments the then President Brian Kelly made about charging off more than $5 million in SVB toxic assets.

    We know a Federal investigation continues because both Melland’s wife and Madjlessi’s wife filed for divorce and disclosed in their petitions that their husbands were being investigated.

    We know the amounts loans are in the $30 million to $50 million dollar range which exceeds the bank’s capital by as much as 120%. As such those exposures were Unsafe and Unsound and likely exceeded legal lending limits.

    We know bank management made loans to other Madjlessi affiliates and friends for condo loans, homes, and 101 Houseco, LLC Jim House was a referral of Bijian’s at the least. The Board and management knew they were doing deals with Madjlessi friends and family (Irvine, Farhari) they enjoyed it doing more and more.

    Shareholder suits may uncover more details in their depositions and testimony when they go to trial. The FDIC hasn’t yet decided whether they want to sue the Directors and management personally for negligence to recoup their losses. And other pending Federal cases may yet uncover Federal violations only time will tell.

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Dianne Reber Hart is our Sonoma correspondent.

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