October 27, 2014
By Bob Coleman
Editor, Coleman Report
Thomas Yu is guilty of failing to properly downgrade poor performing loans. This enabled the bank to artificially inflate its earnings for 2008.
The earnings were reported in a press release and a conference call in January 2009. Financials were filed with the SEC in March 2009.
In May 2009, the bank announced the financial statements were unreliable and it intended to restate earnings.
The bank failed in November 2009 causing losses to the FDIC of $1.1 billion. Additionally, $297 million in TARP funds were not repaid.
Yu faces five years in jail and a $250,000 fine, plus restitution.