Executives to be Imprisoned for Lying About 2008 Financial Crisis

This December, the President and the CFO of Wilmington Trust Corp. were each sentenced to 6 years in federal prison and fined $300,000 for their actions in 2009 and 2010 for conspiracy to defraud the US government and investors. The U.S. District Judge in Delaware called this the “worst financial crime in Delaware” in decades. The two defendants approved fraudulent financial reports, lying about real estate development losses to induce further investment. They were not convicted for the financial failure, but rather for lying to the Securities Exchange Commission, regulators and investors. By failing to reveal bad loan losses, they enticed $287 million from investors and $330 million from the Troubled Asset Relief Program (TARP) in 2009 and 2010. The bank was sold in 2010 at a deep discount and the victims included hundreds of bank employees’ jobs and investors’ capital and retirement savings. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 arose from such abuses by financial institutions.