Defendant Name: Regions Financial Corporation

Defendant Type: Public Company
SIC Code: 6021
CUSIP: 7591EP10

Document Reference: 2014-125-dpa

Document Details

Legal Case Name
Document Name Deferred Prosecution Agreement
Document Date 10-Jun-2014
Document Format Civil Proceeding
Case Number
Allegation Type Issuer Reporting and Disclosure
Document Summary After an investigation, the SEC alleged that Regions Financial Corporation ("Respondent" or "Regions"), through the actions of three senior managers who intentionally misclassified loans that should have been recorded as impaired for accounting purposes, violated the federal securities laws. The managers' fraudulent conduct caused Regions to overstate its net income available to common shareholders and its earnings per common share in public filings. According to the SEC's allegations, Respondent failed to maintain compliant internal accounting controls. Prior to a public enforcement action being brought by the SEC, without admitting or denying the allegations, Regions offered to accept responsibility for its conduct. Accordingly, the SEC and the Respondent entered into a deferred prosecution agreement. The agreement credits the company's extensive remedial efforts, including the termination of its employment relation with the three senior managers who engaged in the fraudulent conduct, the employment of four new directors with greater financial risk experience, the creation of an Ethics Council, the revision and enhancement its ethics policy and code of conduct, and the creation of a new problem asset division with entirely new management and significantly enhanced procedures. The agreement also credits the substantial cooperation by Regions during the SEC's investigation. Under the terms of the deferred prosecution agreement, Respondent must refrain from violating the securities laws, accepting federal or state tax credit or deduction for the civil penalties paid under the agreement, and seeking reimbursement or indemnification with regard to any civil penalties paid under the agreement. In addition to various undertakings, Regions agreed to pay a civil penalty in the amount of $26 million. However, the SEC's civil penalty will be considered concurrent with any penalty imposed by the Federal Reserve Board, and any payments made to the Federal Reserve Board in an amount greater than or equal to $26 million shall be deemed to satisfy the civil penalty imposed by the SEC.

Disgorgement & Penalty Information

Resolutions
Deferred-Prosecution Agreement
Various undertakings
Cooperation Before the Resolution
Remedial Acts or Efforts Before the Resolution
Monetary Penalties:

Civil Penalty

Individual:     $26,000,000.00 Shared:    

Related Documents:

2014-125 25-Jun-2014 Press Release--Civil Action
SEC Announces Fraud Charges Against Three Former Regions Bank Executives in Accounting Scheme
On June 25, 2014, the SEC announced fraud charges against three former senior managers of Regions Bank for intentionally misclassifying loans that should have been recorded as impaired for accounting purposes, which resulted in the overstatement of income and earnings per share by the bank's publicly-traded holding company, Regions Financial Corp., in its financial statements. Of the three former executives involved in the fraudulent scheme, two have agreed to settle the SEC's charges by paying penalties of $70,000 apiece and consenting to bars from serving as officers or directors of public companies for a period of five years. The SEC entered into a deferred prosecution agreement with Regions Financial Corp., which substantially cooperated with the agency's investigation and undertook extensive remedial actions. According to the deferred prosecution agreement, the SEC imposed a $26 million penalty that will be offset provided that the company pays a $46 million penalty assessed in the Federal Reserve's action. Regions Financial Corp. must also pay a $5 million penalty to the Alabama Department of Banking. Accordingly, in total, Regions Financial Corp. agreed to pay a total of $51 million to resolve the parallel actions by the SEC, Federal Reserve Board, and Alabama Department of Banking.

Related Actions:

In the Matter of Thomas A. Neely, Jr.
In the Matter of Jeffrey C. Kuehr and Michael J. Willoughby