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Appeals of Material Supervisory Determinations: Guidelines & Decisions
(July 17, 1995)
As of the examination date, the bank was in substantial noncompliance with the February 10, 1992 FFIEC Policy Statement on Securities Activities. Relevant securities activities were not being conducted in a segregated trading account; documentation demonstrating that prices paid for high risk mortgage derivatives represented fair market value was not being maintained; there was no board approved investment policy; the activities were being conducted from a remote location without maintenance of bank records on premises; and there were virtually no limits on the investment officer’s authority. Deficiencies in managing the bank’s investment portfolio had been brought to the board’s attention at previous examinations with no effective corrective action taken.
Pursuant to the FDIC’s guidelines, the scope of the FDIC’s review was limited to the facts and circumstances that existed at the time of the examination and no consideration was afforded any changes in circumstances occurring after that date or to any subsequent corrective action.
This determination is considered a final supervisory decision of the Federal Deposit Insurance Corporation.
By direction of the Supervision Appeals Review Committee of the Federal Deposit Insurance Corporation.
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