OCC seeks prohibitions, $500k in penalties against two former TX bank officers

Two former officers of the now-defunct First National Bank (Edinburg, Texas) would be barred from any future work in federally insured financial institutions and required to pay a combined $500,000 – that’s $250,000 each – in civil money penalties under orders sought by the Office of the Comptroller of the Currency (OCC).

The OCC is scheduled to present its case Jan. 31 before an administrative law judge (virtually) against Saul Ortega, the bank’s former chief financial officer, director, president, chief executive officer, and board chairman; and David Rogers Jr., the bank’s former board chairman.

Then reporting $3.1 billion in assets, First National Bank was closed by the Federal Deposit Insurance Corp. (FDIC) in September 2013. As noted in the OCC’s notice of charges, the bank sustained large losses from agency mortgage loans that went under during the 2008 financial downturn. The OCC said Ortega and Rogers engaged in activities designed to hide the bank’s poor condition.

The OCC said it has charged Ortega and Rogers with engaging in violations of law and OCC orders; unsafe or unsound banking practices; and breaches of fiduciary duty regarding bank loans issued to finance a capital raise, bank loans issued to finance sales of the bank’s other real estate owned (OREO), and the bank’s accrual of interest on loans in non-accrual status. The agency also said Rogers breached his fiduciary duty with regard to bank loans to a family member’s businesses.

The OCC has posted a schedule that shows the virtual hearing being held over a 12-day period. The hearing can be viewed online or heard by phone; the schedule provides further details.

OCC to Hold Virtual Hearing on Charges Against Saul Ortega and David Rogers; Agency Seeks Prohibition Orders and Civil Money Penalties

How to access the virtual hearing