(Reuters) — A Maryland bank agreed to pay about $22.9 million to settle allegations by two U.S. regulators that it failed to disclose tens of millions of dollars in loans to family foundations belonging to its former longtime chief executive.
Eagle Bancorp Inc., of Bethesda, Maryland, will pay $19.5 million in civil penalties and more than $3.35 million in disgorgement and interest to settle with the Federal Reserve Board and the Securities and Exchange Commission, regulators said on Tuesday.
Ronald Paul, 66, of Potomac, Maryland, an Eagle founder who was CEO from 1997 until his retirement in 2019, agreed to pay about $521,000, including $390,000 in civil penalties. The Fed permanently banned him from working in the banking industry.
Neither Eagle nor Mr. Paul admitted or denied wrongdoing.
Both were content to put the matter behind them, according to separate statements from Eagles CEO Susan Riel and Lance Wade, a lawyer for Mr. Paul.
Mr. Wade also said the SEC̵7;s consent decree against Eagle included allegations about Paul that were “false, misleading and unsupported by credible evidence,” and Paul would have disputed them if the SEC had included them in its suit against him.
Regulators accused Eagle of extending about $90 million in credit to entities Paul owned or controlled from 2015 to 2018, without disclosing it to investors in periodic reports and proxy statements.
The SEC also said that after short seller Aurelius Value questioned the loans to Paul’s trusts in December 2017, Eagle and Paul falsely assured investors that the loans were accurate.
“Adequate disclosures about related party transactions are essential for investors to evaluate an issuer’s corporate governance,” Sanjay Wadhwa, deputy director of the SEC division, said in a statement.
Eagle has 20 bank offices in Washington, DC and suburban Maryland and Virginia.