LAWSUITS NEWS & LEGAL INFORMATION
First BanCorp.
New York, NY: (Aug-07-07) The US Securities and Exchange Commission brought a lawsuit against First BanCorp., alleging that the Puerto Rican bank concealed the true nature of more than $4 billion of mortgage-related transactions. The bank did not concede to any wrongdoing or admit to the allegations.
In a settlement reached, First BanCorp. agreed to a permanent injunction in the matter as well as agreed to pay an $8.5 million penalty to settle the Securities and Exchange Commission lawsuit. In its complaint filed in federal court in Manhattan, the SEC alleged that Doral Financial Corp., which purportedly sold the mortgages to First BanCorp, improperly recognized income on the transactions. In September 2006, Doral, without admitting or denying wrongdoing, agreed to pay $25 million to settle SEC allegations that it inflated its income between 2000 and 2004.
Sources stated that First BanCorp's former senior management also backdated documents and misrepresented terms of transactions to its independent auditor to avoid a restatement in November 2004. As part of the settlement agreement, the company said it is required to deposit $61 million into a settlement fund within 15 days and will pay the remaining $13.25 million by December 31, 2007. The company stated that the settlement won't affect its earnings or capital in 2007. [FORBES: MORTGAGE TRANSACTIONS]
Published on Aug-8-07
In a settlement reached, First BanCorp. agreed to a permanent injunction in the matter as well as agreed to pay an $8.5 million penalty to settle the Securities and Exchange Commission lawsuit. In its complaint filed in federal court in Manhattan, the SEC alleged that Doral Financial Corp., which purportedly sold the mortgages to First BanCorp, improperly recognized income on the transactions. In September 2006, Doral, without admitting or denying wrongdoing, agreed to pay $25 million to settle SEC allegations that it inflated its income between 2000 and 2004.
Sources stated that First BanCorp's former senior management also backdated documents and misrepresented terms of transactions to its independent auditor to avoid a restatement in November 2004. As part of the settlement agreement, the company said it is required to deposit $61 million into a settlement fund within 15 days and will pay the remaining $13.25 million by December 31, 2007. The company stated that the settlement won't affect its earnings or capital in 2007. [FORBES: MORTGAGE TRANSACTIONS]
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