The U.S. Securities and Exchange Commission sued former United Commercial Bank Vice President John Cinderey, accusing him of creating false records tied to the defunct San Francisco-based bank’s evaluation of loan risks.
United Commercial, a unit of UCBH Holdings Inc (UCBHQ:US)., was seized by regulators in November 2009. It failed following the 2008 credit crisis and caused a $2.5 billion loss to the Federal Deposit Insurance Corp.’s insurance fund, according to the SEC. Cinderey, 64, was in charge of the bank’s commercial banking division, the SEC said.
Cinderey, taking orders from his superiors during the financial crisis, “misstated and omitted material information in documents provided to the bank’s independent auditors,” the SEC said in its complaint filed today in federal court in San Francisco. Cinderey “altered memoranda addressing the risks associated with certain large loans and the potential losses the bank faced from the loans,” which auditors relied on, according to the complaint.
Three former executives at the bank were sued by the SEC last year over claims they misled investors by concealing at least $65 million in loan losses before the lender collapsed.
In its suit filed in October, the SEC claimed United Commercial Bank’s chief executive officer, Thomas Wu, worked with Chief Operating Officer Ebrahim Shabudin and senior officer Thomas Yu to hide impaired assets from auditors, causing UCBH Holdings (UCBHQ:US) to understate 2008 operating losses.
Cinderey’s lawyer, Mary McNamara, didn’t immediately return a call seeking comment.
The case is Securities and Exchange Commission v. Cinderey, 12-01519, U.S. District Court, Northern District of California (San Francisco).
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