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2000 - Rules and Regulations


Subpart C—Rules of Practice Before the FDIC and Standards of Conduct

§ 308.108  Sanctions.

(a)  General rule.  Appropriate sanctions may be imposed when any counsel or party has acted, or failed to act, in a manner required by applicable statute, regulations, or order, and that act or failure to act:

(1)  Constitutes contemptuous conduct;

(2)  Has in a material way injured or prejudiced some other party in terms of substantive injury, incurring additional expenses including attorney's fees, prejudicial delay, or otherwise;

(3)  Is a clear and unexcused violation of an applicable statute, regulation, or order; or

(4)  Has unduly delayed the proceeding.

(b)  Sanctions.  Sanctions which may be imposed include any one or more of the following:

(1)  Issuing an order against the party;

(2)  Rejecting or striking any testimony or documentary evidence offered, or other papers filed, by the party;

(3)  Precluding the party from contesting specific issues or findings;

(4)  Precluding the party from offering certain evidence or from challenging or contesting certain evidence offered by another party;

(5)  Precluding the party from making a late filing or conditioning a late filing on any terms that are just; and

(6)  Assessing reasonable expenses, including attorney's fees, incurred by any other party as a result of the improper action or failure to act.

(c)  Limits on dismissal as a sanction.  No recommendation of dismissal shall be made by the administrative law judge or granted by the Board of Directors based on the failure to hold a hearing within the time period called for in this Part 308, or on the failure of an administrative law judge to render a recommended decision within the time period called for in this Part 308, absent a finding:

(1)  That the delay resulted solely or principally from the conduct of the FDIC enforcement counsel;

(2)  That the conduct of the FDIC enforcement counsel is unexcused;

(3)  That the moving respondent took all reasonable steps to oppose and prevent the subject delay;

(4)  That the moving respondent has been materially prejudiced or injured; and

(5)  That no lesser or different sanction is adequate.

(d)  Procedure for imposition of sanctions.  (1)  The administrative law judge, upon the request of any party, or on his or her own motion, may impose sanctions in accordance with this section, provided that the administrative law judge may only recommend to the Board of Directors the sanction of entering a final order determining the case on the merits.

(2)  No sanction, other than refusing to accept late papers, authorized by this section shall be imposed without prior notice to all parties and an opportunity for any counsel or party against whom sanctions would be imposed to be heard. Such opportunity to be heard may be on such notice, and the response may be in such form, as the administrative law judge directs. The opportunity to be heard may be limited to an opportunity to respond orally immediately after the act or inaction covered by this section is noted by the administrative law judge.

(3)  Requests for the imposition of sanctions by any party, and the imposition of sanctions, shall be treated for interlocutory review purposes in the same manner as any other ruling by the administrative law judge.

(4)  Section not exclusive.  Nothing in this section shall be read as precluding the administrative law judge or the Board of Directors from taking any other action, or imposing any restriction or sanction, authorized by applicable statute or regulation.

[Codified to 12 C.F.R. § 308.108]

§ 308.109  Suspension and disbarment.

(a)  Discretionary suspension and disbarment.  (1)  The Board of Directors may suspend or revoke the privilege of any counsel to appear or practice before the FDIC if, after notice of and opportunity for hearing in the matter, that counsel is found by the Board of Director:

(i)  Not to possess the requisite qualifications to represent others;

(ii)  To be seriously lacking in character or integrity or to have engaged in material unethical or improper professional conduct;

(iii)  To have engaged in, or aided and abetted, a material and knowing violation of the FDIA; or

(iv)  To have engaged in contemptuous conduct before the FDIC. Suspension or revocation on the grounds set forth in paragraphs (a)(1)(ii), (iii), and (iv) of this section shall only be ordered upon a further finding that the counsel's conduct or character was sufficiently egregious as to justify suspension or revocation.

(2)  Unless otherwise ordered by the Board of Directors, an application for reinstatement by a person suspended or disbarred under paragraph (a)(1) of this section may be made in writing at any time more than three years after the effective date of the suspension or disbarment and, thereafter, at any time more than one year after the person's most recent application for reinstatement. The suspension or disbarment shall continue until the applicant has been reinstated by the Board of Directors for good cause shown or until, in the case of a suspension, the suspension period has expired. An applicant for reinstatement under this provision may, in the Board of Directors' sole discretion, be afforded a hearing.

(b)  Mandatory suspension and disbarment.  (1)  Any counsel who has been and remains suspended or disbarred by a court of the United States or of any state, territory, district, commonwealth, or possession; or any person who has been and remains suspended or barred from practice before the OCC, Board of Governors, the OTS, the NCUA, the Securities and Exchange Commission, or the Commodity Futures Trading Commission; or any person who has been convicted of a felony, or of a misdemeanor involving moral turpitude, within the last ten years, shall be suspended automatically from appearing or practicing before the FDIC. A disbarment, suspension, or conviction within the meaning of this paragraph (b) shall be deemed to have occurred when the disbarring, suspending, or convicting agency or tribunal enters its judgment or order, regardless of whether an appeal is pending or could be taken, and includes a judgment or an order on a plea of nolo contendere or on consent, regardless of whether a violation is admitted in the consent.

(2)  Any person appearing or practicing before the FDIC who is the subject of an order, judgment, decree, or finding of the types set forth in paragraph (b)(1) of this section shall promptly file with the Executive Secretary a copy thereof, together with any related opinion or statement of the agency or tribunal involved. Failure to file any such paper shall not impair the operation of any other provision of this section.

(3)  A suspension or disbarment under paragraph (b)(1) of this section from practice before the FDIC shall continue until the applicant has been reinstated by the Board of Directors for good cause shown, provided that any person suspended or disbarred under paragraph (b)(1) of this section shall be automatically reinstated by the Executive Secretary, upon appropriate application, if all the grounds for suspension or disbarment under paragraph (b)(1) of this section are subsequently removed by a reversal of the conviction (or the passage of time since the conviction) or termination of the underlying suspension or disbarment. An application for reinstatement on any other grounds by any person suspended or disbarred under paragraph (b)(1) of this section may be filed no sooner than one year after the suspension or disbarment, and thereafter, a new request for reinstatement may be made no sooner than one year after the counsel's most recent reinstatement application. The application must comply with the requirements of § 303.3 of this chapter. An applicant for reinstatement under this provision may, in the Board of Directors' sole discretion, be afforded a hearing.

(c)  Hearings under this section.  Hearings conducted under this section shall be conducted in substantially the same manner as other hearings under the Uniform Rules, provided that in proceedings to terminate an existing FDIC suspension or disbarment order, the person seeking the termination of the order shall bear the burden of going forward with an application and with the burden of proving the grounds supporting the application, and that the Board of Directors may, in its sole discretion, direct that any proceeding to terminate an existing suspension or disbarment by the FDIC be limited to written submissions.

(d)  Summary suspension for contemptuous conduct.  A finding by the administrative law judge of contemptuous conduct during the course of any proceeding shall be grounds for summary suspension by the administrative law judge of a counsel or other representative from any further participation in that proceeding for the duration of that proceeding.

(e)  Practice defined.  Unless the Board of Directors orders otherwise, for the purposes of this section, practicing before the FDIC includes, but is not limited to, transacting any business with the FDIC as counsel or agent for any other person and the preparation of any statement, opinion, or other paper by a counsel, which statement, opinion, or paper is filed with the FDIC in any registration statement, notification, application, report, or other document, with the consent of such counsel.

[Codified to 12 C.F.R. § 308.109]

[Section 308.109 amended at 64 Fed. Reg. 62100, November 16, 1999; 68 Fed. Reg. 48270, August 13, 2003, effective October 1, 2003]


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Last updated September 16, 2013 regs@fdic.gov