FDIC Sues Former TierOne Bank Officials For $40M

By: Associated Press Email
By: Associated Press Email

Eight former TierOne Bank officials are being sued by the Federal Deposit Insurance Corp. because regulators say the board members and executives improperly approved risky loans in Las Vegas that contributed to the bank's failure.

The FDIC says more than three-quarters of $200 million of loans in Las Vegas the board reviewed went bad.

TierOne failed in 2010 after concealing the extent of its real estate losses. Its assets were sold to Great Western Bank.

Attorney Gregory Scaglione, who represents former CEO Gil Lundstrom and another executive, says the former bank officials shouldn't be held personally responsible for these loans because they weren't negligent.

Scaglione says regulators and shareholders approved TierOne's plan to start lending in new markets like Las Vegas and Florida.

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