Jackson Jambalaya

#10- Bank can't pay overdrafts of any bank officer over $2,500 without approval of loan committee.

are you kidding me?! Why on earth WOULD a bank pay a bank officer's overdraft? They should be fired or it should be taken from their paycheck. That is so ridiculous!

The Clarion Ledger was rather kind in it's interpretation of the FDIC order concerning Katherine F. Denton. Clarion Ledger:

"Also in January, Kathryn F. Denson, who was affiliated with Heritage, was banned from banking because of "violations, unsafe or unsound banking practices," a complaint on the FDIC's website reads.

Because of Denson's breaches, FDIC said Heritage "will probably suffer financial loss or other damage."

Link to the actual FDIC order is
http://www.fdic.gov/bank/individual/enforcement/2010-01-38.pdf

From the FDIC order:

"The FDIC considered the matter and determined it had reason to believe that:
(a)
The Respondent has engaged or participated in violations, unsafe or unsound banking practices, and/or breaches of fiduciary duty as an institution-affiliated party of the HERITAGE BANKING GROUP, CARTHAGE, MISSISSIPPI (“Bank”);
(b)
By reason of such violations, practices and/or breaches of fiduciary duty, the Bank has suffered or will probably suffer financial loss or other damage and/or the Respondent received financial gain or other benefit; and
(c)
Such violations, practices and/or breaches of fiduciary duty involve personal dishonesty on the part of the Respondent or demonstrate the Respondent's willful and/or continuing disregard for the safety or soundness of the Bank.
The FDIC further determined that such violations, practices and/or breaches of fiduciary duty demonstrate the Respondent's unfitness to serve as a director, officer, person participating in the conduct of the affairs, or as an institution-affiliated party of the Bank, any other insured depository institution, or any other agency or organization enumerated in section 8(e)(7)(A) of the Act, 12 U.S.C. § 1818(e)(7)(A).
The FDIC, therefore, accepts the CONSENT AGREEMENT and issues the following:
ORDER OF PROHIBITION
FROM FURTHER PARTICIPATION
1. KATHRYN F. DENSON is hereby, without the prior written approval of the FDIC and the appropriate Federal financial institutions regulatory agency, as that term is defined in section 8(e)(7)(D) of the Act, 12 U.S.C. § 1818(e)(7)(D), prohibited from:"

I think what Laraye Brown did was go into FDIC, run a search on Heritage banking group, and throw together everything she found, regardless if it made sense or had anything to do with the other. Not surprising, she is a lazy reporter and has a reputation for being pretty unprofessional.

The story at the C-L was probably average in terms of what many papers would write about a similar set of circumstances.

The average reporter typically does not have either the background nor the time to investigate and do much more than was done.

IMO a significant number would not have found and reported on the Denson matter.

It is obvious that the average media outlet is much more likely to report on what others have exposed, rather than to do the research and investigation to discover and expose things themselves.

Sethi and his group took over the bank in April of 2007.

Take a look at their balance sheet from back then and compare it to now. ouch.

First quarter 2007 earnings before Sethi takes over. Sethi now owns 38% of the bank.