FDIC Sues Former Bears QB Jim McMahon #news #fdic #finance #espn
CHICAGO (CN) -Former Chicago Bears quarterback Jim McMahon is one of nine former directors and officers of Broadway Bank the FDIC sued in Federal Court, claiming reckless lending led to the bank’s collapse and cost the FDIC $104 million.
The Federal Deposit Insurance Corp., as receiver for Broadway Bank, sued McMahon, six other former board members and two bank former officers.
McMahon led the Bears to their Super Bowl title in 1985.
The FDIC says McMahon served on Broadway’s Board of Directors from 2003 through 2008. “As a member of the Board, McMahon approved the $28 million loan to Normandy Shores, LLC, which caused over $19 million in losses to the Bank.
Despite his Board responsibilities, McMahon repeatedly missed critical Board meetings,” the FDIC says in its complaint. It added: “As members of the Board of Directors and the Bank’s Loan Committee, the director defendants and officer defendants recklessly implemented a strategy of rapidly growing Broadway’s assets by approving high-risk loans without regard for appropriate underwriting and credit administration practices, the Bank’s written loan policies, federal lending regulations and warnings from the Bank’s regulators.”
The FDIC claims: “Broadway Bank was an institution driven by a disregard for risk and a willingness to lend millions of dollars to uncreditworthy borrowers for speculative commercial building projects not only in Illinois, where the Bank was located, but in New York, Florida, California and other locales.”
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