On April 24, 2013, the SEC issued an order instituting a cease-and-desist proceeding against Capital One Financial Corporation, and its officers, Peter A. Schnall and David A. LaGassa. According to the SEC: "Capital One Financial Corporation ('Capital One'), a provider of consumer and commercial lending and diversified banking services, materially understated its provision for loan and lease losses (the 'provision for loan losses' or 'loan loss expense') for the second and third quarters of 2007. The understatement was of the provision for loan losses for Capital One's auto finance business, known as Capital One Auto Finance ('COAF'). As a result of the understatement, Capital One materially understated its provision for loan losses by as much as $72 million for its second quarterly filing and as much as $51 million in its third quarterly filing. Capital One also failed to maintain effective internal controls to ensure the appropriate and accurate recording and reporting of its loan loss expenses." On April 24, 2013, the Commission accepted offers of settlement from Capital One Financial Corporation, Peter A. Schnall, and David A. LaGassa.

On April 24, 2013, the SEC announced that it charged Capital One Financial Corporation ("Capital One") and two senior executives--former Chief Risk Officer Peter A. Schnall ("Schnall") and former Divisional Credit Officer David A. LaGassa ("LaGassa")--for understating millions of dollars in auto loan losses incurred during the months leading into the financial crisis. According to the SEC's order instituting settled administrative proceedings, for the second and third quarters of 2007, Capital One's loan loss expense for Capital One Auto Finance did not appropriately estimate probable incurred losses in accordance with accounting requirements. The SEC's order also finds that Schnall and LaGassa caused Capital One's understatements of its loan loss expense by deviating from established policies and procedures and failing to implement proper internal controls for determining its loan loss expense. In order to settle the SEC's charges, Capital One agreed to pay $3.5 million.