Monday, 27 March 2023

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Sterling Bancorp enters into plea agreement with DOJ – TipRanks Financial Blog

The Department of Justice said in a statement: “A Southfield, Michigan-headquartered bank holding company has agreed to plead guilty to securities fraud for filing false securities statements relating to its 2017 initial public offering and its 2018 and 2019 annual filings. According to a signed plea agreement that will be publicly filed in court, Sterling Bancorp was the holding company for its wholly owned subsidiary, Sterling Bank and Trust F.S.B. . Sterling – with branches located in San Francisco, Los Angeles, Seattle, New York, and Southfield – completed an IPO in 2017, and the Company’s stock began trading on the NASDAQ exchange under the ticker symbol “SBT.” “For years, Sterling originated residential mortgages that were rife with fraud to pad its bottom line and then lied about these loans in its IPO and subsequent public filings, defrauding unwitting investors,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This proposed guilty plea reflects the nature and seriousness of the wrongdoing and demonstrates the Department of Justice’s commitment to protecting the integrity of our public markets, holding corporations accountable for their criminal misconduct, and compensating victims for their losses.” The largest portion of the Bank’s loan portfolio was composed of residential mortgage loans. In or around 2011, the Bank established a residential mortgage loan program known as the Advantage Loan Program or ALP . Between 2011 and 2019, the Bank’s employees and agents originated at least $5 billion in ALP loans. The Bank touted the ALP’s flexible documentation requirements and fast underwriting and closing capabilities. The program required a minimum 35% down payment and charged higher rates and fees than generally were available elsewhere in the market, but it did not require submission of typical loan documentation, such as an applicant’s tax returns or payroll records. “The consequences of this type of financial fraud scheme are damaging and far-reaching,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners remain committed to protecting good-faith investors and safeguarding the integrity of our markets from companies that commit securities fraud.” Reference Link

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