Anchor BanCorp Wisconsin denies all wrongdoing associated with a case filed by the Securities and Exchange Commission on Aug. 14; regardless, the company has agreed to settle. The SEC accused Anchor BanCorp of fraud only two days after the company filed for bankruptcy.
It is alleged that discrepancies were found in the company's earnings report during 2009, and the company did not take immediate action to correct the information. It is also alleged that the former chief financial officer underreported losses and failed to consider $7.4 million held in a reserve account. The agreement provides that the former CFO will pay a penalty of $75,000. The fine is approximately equal to half of the man's salary in 2009. He retired in 2010. As part of the settlement, the former CFO will be banned from serving as a director or officer of a public company for five years. Neither he nor the bank admit any wrongdoing.
A representative for Anchor BanCorp stated that the SEC is alleging only very technical violations of accounting regulations. He noted that no current employee is believed to have had any knowledge of the issue. The SEC investigation is not related to the company's bankruptcy.
Although a corporation may not be put into a jail cell, the law does consider corporations to be people and does allow criminal judges to punish corporate wrongdoing. Typically, a corporation that is found to have committed a crime will be ordered to pay a fine. A criminal defense attorney may be able to negotiate the amount of that fine or investigate for evidence to try to have charges reduced or dismissed.
Source: FOX 11, "SEC says Anchor BanCorp settling fraud lawsuit", August 16, 2013