Trustmark settled with the Securities and Exchange Commission for $6.5 million in the Lamar Adams case Thursday. The Jackson bank announced in an SEC filing Friday:
On August 30, 2023, Trustmark National Bank (“Trustmark”) agreed to a settlement in principle (the “Settlement”) relating to litigation and claims involving Arthur Lamar Adams, Madison Timber Properties, LLC, and other related entities (collectively “Adams/Madison Timber”). The Settlement would resolve the lawsuit filed on December 30, 2019, by Alysson Mills, the court-appointed Receiver for Adams/Madison Timber (the “Receiver”), in the United States District Court for the Southern District of Mississippi, as well as asserted and unasserted claims of investors who allegedly incurred losses due to their investments with Adams/Madison Timber. Trustmark Corporation, the parent company of Trustmark, has provided disclosure relating to these matters in its periodic reports on Forms 10-K and 10-Q throughout the pendency of these actions.
The parties to the Settlement are, on the one hand, Alysson Mills, in her capacity as Receiver; and, on the other hand, Trustmark. The Receiver sought to recover from the defendants, for the benefit of the receivership estate and investors who were allegedly defrauded by Adams/Madison Timber, damages as well as related costs allegedly attributable to actions of the defendants that allegedly facilitated or enabled illegal and fraudulent activities engaged in by Adams and Madison Timber.
The Settlement was negotiated via mediation conducted by the United States Magistrate Judge. Pursuant to the Settlement the lawsuit captioned Alysson Mills, in her Capacity as the Court-Appointed Receiver for Arthur Lamar Adams and Madison Timber Properties, LLC v. Trustmark National Bank, et al., Civ. Act. No. 3:19-cv-941-CWR-BWR, pending in the United States District Court for the Southern District of Mississippi (“the Lawsuit”) will be dismissed with prejudice, and the Receiver will fully release all claims against Trustmark and any of its employees, agents and representatives. The Settlement includes the parties’ agreement to seek the Court’s entry of bar orders prohibiting any continued or future claims by anyone against Trustmark and its related parties relating to Adams/Madison Timber, whether asserted to date or not. The bar orders therefore would prohibit all litigation relating to Adams/Madison Timber described in Trustmark Corporation’s SEC periodic reports. Final Court approval of a bar order is a condition of the Settlement.
The Settlement is also subject to the execution and delivery of a definitive Settlement Agreement reflecting the terms of the Settlement, notice to Adams/Madison Timber investors, and final, non-appealable approval by the Court and entry of a judgment dismissing the Lawsuit against Trustmark. The timing of any final decision by the Court is subject to the discretion of the Court and any appeal. If the Settlement, including the bar order described above, is approved by the Court and is not subject to further appeal, Trustmark will make a one-time cash payment of $6.5 million to the Receiver.
While Trustmark believes that the Settlement is consistent with the terms of settlements in similar cases that have been approved and were not successfully appealed, it is possible that the Court may decide not to approve the Settlement Agreement or that the Court of Appeals could reject the Settlement Agreement on an appeal, either of which could render the Settlement a nullity.
Trustmark makes no admission of liability or wrongdoing in connection with Adams/Madison Timber, and the Settlement Agreement will so provide. As has been the case throughout the pendency of the Lawsuit, Trustmark expressly denies any liability or wrongdoing with respect to any matter alleged regarding the Ponzi scheme operated by Adams/Madison Timber. Trustmark’s relationship with Adams/Madison Timber consisted of ordinary banking services provided to business deposit customers, in addition to loans to entities in which Adams held interests made on customary commercial terms.
While federal law prohibits Trustmark from disclosing the full extent of its actions, Trustmark believes that its proactive communications with law enforcement agencies regarding its concerns with the activities of Adams/Madison Timber, and its cooperation with such authorities, resulted in the discovery and termination of Adams/Madison Timber's criminality. All of the Ponzi scheme promissory notes that were unpaid when the Ponzi scheme collapsed were issued by Adams/Madison Timber after Trustmark had closed its Adams/Madison Timber accounts.
Trustmark and Trustmark Corporation have determined that it is in the best interest of Trustmark, Trustmark Corporation and the shareholders of Trustmark Corporation to enter into the Settlement, to eliminate the risks and costs of continuing litigation.
As a result of the entry into the Settlement, Trustmark Corporation has recognized a $6.5 million litigation settlement expense included in non-interest expense related to the Adams/Madison Timber litigation during the third quarter of 2023. Trustmark Corporation expects that the Settlement will be tax deductible.
Lamar Adams used Trustmark for the primary banking activities for himself and Madison Timber from 2009 to 2016.
The SEC is trying to claw back illegal profits earned by Lamar Adams and promoters of a $164 million Ponzi scheme based on phony timber investments. Receiver Alysson Mills represents the SEC in recovering assets for later distribution to the victims. Her efforts include suing promoters who received commissions as well as the Butler Snow and Baker Donelson law firms. Adams is incarcerated in federal prison after he pleaded guilty to one count of wire fraud. Butler Snow settled for $9.5 million. Mills and Baker Donelson are still slugging it out in federal court. Earlier post on Trustmark lawsuit.
23 comments:
Banks can not be trusted. Using a credit union is your best choice.
Just $149 million left.
I fail to understand how Trustmark was involved other than receiving deposits from their customer. To me, they shouldn’t be held responsible for what their customer diff.
I'd trust my mattress before trusting Trustmark.
Trustmark should resign.
@8:49
One of the most delicious ironies is that half of more of that money likely disappeared down some cryptocurrency black hole because crypto has always been about facilitating crime and money laundering going all the way back to the early days of buying drugs and other contraband on The Silk Road.
Imagine if these hillbillies stole nearly $200 million only to have it stolen from them by Sam Bankman-Fried and his little trolldoll girlfriend. Both of them are now using it to pay off every politician they can to save their asses.
Now big brother wants to start using central bank digital currency as a tool of socio-political control
Het DA @ 9:00. Read this and then apologize....
http://kingfish1935.blogspot.com/2019/12/trustmark-goes-timberrrrrrrrrrrrr.html
I’m so happy! The Legal department at Trustmark is very hard to deal with and have to approve transactions that most banks leave up to the branch managers.
"Using a credit union is your best choice."
Nope! A credit union is to a bank what McDonald's is to Chick Fil A.
Didn't BankPlus have some people "involved" in this also ?
Bankers, and lawyers, occupy the two lowest positions on the scum sucking totem pole. It couldn't have happened to a more deserving group.
@11:42 AM
You are going to have to back that asinine statement up with some facts.
A bank= a private, for profit lending business often run by greedy (((usurers)))
A credit union= a non-profit entity run by the members who met and vote quarterly
During the recession of 2008, Trustmark showed its true colors. It had worked with certain builders for years. When things got bad, Trustmark bailed on them. Instead of foreclosing on properties, Trustmark sued builders on their personal guarantees first. In other words, the collateral meant nothing and Trustmark went after the builders' homes and personal property. The bank could have sold properties and sued on remaining amounts. It would still have been a challenging situation, but imitigating the damages would have helped.
Trustmark was within its legal right to do this. The bank sent a message to customers - this isn't a partnership and when times get tough we are not in this together. Other banks weathered the storm. Trustmark said to h-ll with its customers.
Trustmark is not hurt at all. All they will do is increase the interest rate on credit card customers. From 27% interest to 35% interest.
"Poff Paid For".
Now, let's go play golf & get smashed. Who's the designated golf cart driver?
@ 1:50…. A bank is not in a partnership with a business they lend money to. They lend money and the borrower promises to pay it back. They don’t give the bank equity, the bank does not sign up to suffer the ups and downs of your business. If you want that go to a private equity group and sell a portion of your company.
Me thinks there may be some TRMK shareholders lurking on JJ.
I'd have to guess the average age would have to be 97, but I guess they have kids who inherited the shit.
@ 1:07 - How about I back it up by assuring you that I was a member of a credit union from August 1969 until sometime in the year 2016.
I watched it grow from a state agency credit union serving hundreds of employees, statewide, to a 'merged' bunch of ne'er do wells who nobody knew and nobody could walk in and talk to, if you could find their location.
Each of our 40 or more locations had a treasurer and any of us could take out a loan over the phone or in person. Then the whole thing went to shit when it merged with some larger, faceless entity with officers nobody knew and those who ran it being elected largely by proxy.
The thing that encouraged me to withdraw my $32,400 dollars was realizing they had changed me a dormancy fee for two years.
Your claiming credit unions are owned and run by members is like the claim that members own and run PERS. Bull shit!
How in the world did this discussion evolve into a diatribe against credit unions? Nobody cares!
Never should have happened if Trustmark had Verified Timber land to begin with!
Hmmm. Let's see. Trustmark took a $100 million hit last December to settle receiver's lawsuit stemming from the Stanford investment scam. Now another $6.5 million from the Timber two-step. Lordy!
Here's the real question. How long did the feds allow the scheme to continue after the 1st SAR was filed? Hmmmm? You'll hit a titanium wall trying to get that answer
Trustmark caved-
@9:14, Banks don’t verify assets for operation of checking accounts. There were no loans on the property. How would a bank know what all assets a corporation holds.
@11:04, Exactly; but the banks were an easy target to cover for investors not doing their due diligence, and an investigation being delayed.
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