Exhibit 10.4
UNITED STATES OF AMERICA
Before The
OFFICE OF THRIFT SUPERVISION
___________________________

             
 
    )      
In the Matter of
    )     Order No.:
 
    )      
BankAtlantic
    )     Date:
Fort Lauderdale, Florida
    )      
 
    )      
OTS Docket No.: 05551
    )      
 
    )      

___________________________
CONSENT ORDER TO CEASE AND DESIST FOR AFFIRMATIVE RELIEF
     WHEREAS, BankAtlantic, Fort Lauderdale, Florida, OTS Docket No. 05551
(BankAtlantic or Bank), by and through its Board of Directors (Board), has
executed a Stipulation and Consent to the Issuance of an Order to Cease and
Desist for Affirmative Relief and an Order of Assessment of a Civil Money
Penalty (Stipulation); and
     WHEREAS, BankAtlantic, without admitting or denying that grounds exist for
initiating an administrative cease and desist proceeding, by executing the
Stipulation, has consented and agreed to the issuance of this Consent Order to
Cease and Desist for Affirmative Relief (C&D Order) by the Office of Thrift
Supervision (OTS), pursuant to Section 8(b) of the Federal Deposit Insurance Act
(FDIA), 12 U.S.C. § 1818(b)1; and
     WHEREAS, the Director of the OTS has delegated to the Regional Directors of
the OTS the authority to issue consent orders on behalf of the OTS pursuant to
provisions of Section 8 of the FDIA, 12 U.S.C. § 1818.
 

1   All references to the United States Code (U.S.C.) are as amended.

 

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     NOW, THEREFORE, IT IS ORDERED THAT:
Order to Cease and Desist
1. The Bank and its directors, officers, employees, and agents shall cease and
desist from any action (alone or with another or others) for or toward causing,
bringing about, participating in, counseling or the aiding and abetting of any
violation of:

  a.   the Currency and Foreign Transactions Reporting Act, as amended by the
USA Patriot Act and other laws (the Bank Secrecy Act or BSA), 31 U.S.C. §§ 5311
et seq., and the related BSA regulations issued by the U. S. Department of the
Treasury, 31 C.F.R. Part 103, and the OTS, 12 C.F.R. § 563.177 (collectively
with the aforementioned laws and regulations, the BSA Laws and Regulations); and
    b.   the OTS regulations governing suspicious activity reports (SAR) and
other reports and statements set forth in 12 C.F.R. § 563.180.

Anti-Money Laundering/Bank Secrecy Act Compliance
2. The Board shall review the Bank’s program for compliance with the BSA Laws
and Regulations (BSA Compliance Program) not less than annually and adopt and
implement such revisions and amendments as are necessary to ensure: (i) the
adequacy and effectiveness of the BSA Compliance Program; (ii) BankAtlantic’s
continued compliance with the BSA Laws and Regulations; (iii) the appropriate
identification and monitoring of accounts and transactions that pose greater
than normal risks for compliance with the BSA Laws and Regulations; (iv) the
timely and accurate reporting of suspicious activities or transactions with
appropriate law enforcement and bank regulatory authorities; and (v) the
accurate completion and maintenance of documents, forms, logs and records as
required or necessitated by the BSA Laws and Regulations. The Board shall, at a
minimum, take the following actions:

  a.   The Board shall review the Bank’s customer identification policies and
procedures (CIP Policy) and know your customer policies and procedures

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(KYC Policy) and ensure that the weaknesses, deficiencies and violations
discussed in the 2004 Examination have been fully addressed and that the CIP
Policy and KYC Policy are adequate and effective to ensure the Bank’s compliance
with applicable laws, regulations and agency guidance.

  b.   The Board shall review the Bank’s policies and procedures for compliance
with the applicable requirements of the regulations of the U.S. Department of
the Treasury Office of Foreign Assets Control (OFAC), 31 C.F.R. Part 500, (OFAC
Policy) and ensure that the weaknesses, deficiencies and violations discussed in
the 2004 Examination have been fully addressed and that the OFAC Policy is
adequate and effective to ensure the Bank’s compliance with applicable laws,
regulations and agency guidance.     c.   The Board shall ensure that the Bank’s
BSA Compliance Program incorporates anti-money laundering (AML) procedures and
systems, including, as may be appropriate, AML software, to adequately monitor
(i) wire transfer activity; (ii) foreign currency exchange transactions;
(iii) cash and automatic teller machine transactions; (iv) check processing
transactions, e.g., automated clearing house transactions; (v) monetary
instrument transactions, e.g., money orders, cashier checks, travelers checks,
etc.; (vi) account transfers; and (vii) lending activity, to timely and
effectively identify suspicious transactions for appropriate action. The Bank’s
AML monitoring procedures shall be based upon periodic risk assessments of the
Bank’s business activities, products, services and customers, to be conducted at
least annually or more frequently, if warranted. Management shall review all
accounts or transactions identified as suspicious, consistent with written
monitoring and review procedures adopted by the Board, and take appropriate
corrective action (including, without limitation, filing of a SAR and increased
monitoring and oversight). The Bank shall fully document its review of all
accounts and transactions identified as suspicious, the determinations made
regarding such accounts and transactions, and the corrective actions taken with
regarding to such accounts and transactions.

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  d.   Management shall conduct a comprehensive review of the Bank’s departments
assigned responsibility for compliance with the BSA Compliance Program and the
BSA Laws and Regulations (BSA Department) to determine the adequacy of the
organization and resources dedicated to the BSA Department. This review shall
include, at a minimum, assessment of the capability of the BSA Officer and
his/her supporting staff to monitor and ensure compliance with the Bank’s BSA
Compliance Program and the BSA Laws and Regulations, taking into account
(i) knowledge of the process and systems for monitoring suspicious activities;
(ii) knowledge and expertise concerning the BSA Compliance Program and the BSA
Laws and Regulations; (iii) knowledge and expertise in fraud control and
compliance monitoring; (iv) authority to correct identified deficiencies;
(v) reporting structure and independence from Bank Management; (vi) the Bank’s
methodology for collecting, maintaining, and recalling information related to
transactions that pose greater than normal risks for BSA compliance; and
(vii) evaluation of the types of transactions, accounts, products, services, and
geographic areas that pose greater than normal risks for compliance with the BSA
Compliance Program and the BSA Laws and Regulations. Within ninety (90) days
after the Effective Date of this C&D Order, Management shall provide the Board a
written report of its assessment of the Bank’s BSA Department, including any
recommendations for strengthening the BSA Department (BSA Department Report).
The Board shall review the BSA Department Report and ensure that Management
makes changes as needed to strengthen the BSA Department, including ensuring
that the BSA Department and the BSA Officer shall report directly to the
Regulatory Compliance Committee provided for in Paragraph 4 below.     e.  
Management shall maintain, and the Board shall review and adopt, a comprehensive
training program for all appropriate operational and supervisory personnel to
ensure awareness of their responsibility for (i) compliance with the
requirements of the BSA Laws and Regulations and the

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OTS regulations governing SAR filings; (ii) the BSA and AML risks inherent to
their departments and products; and (iii) any changes to the Bank’s BSA
Compliance Program required by this C&D Order, the Bank’s BSA Audit, future OTS
examinations, and amendments to the BSA Laws and Regulations (BSA Training
Program). The BSA Training Program should include requirements for mandatory
attendance, the frequency of training, specialized training procedures for
certain departments of the Bank based upon the particular operations and risk
presented by such areas (such as the wire transfer department), and procedures
and timing for updating the BSA Training Program and materials based upon
violations, deficiencies and weaknesses identified by the BSA Audit, future OTS
examinations, or the Bank’s external independent audit. The Bank shall maintain
documentation of all BSA training attended by its employees.

  f.   The Board shall provide for the maintenance of an internal audit
function, independent of the Bank’s compliance function and the BSA Officer and
his/her supporting staff, that will, on at least an annual basis,
comprehensively review and assess (i) the adequacy and effectiveness of the
Bank’s BSA Compliance Program, consistent with the requirements of the BSA Laws
and Regulations, relevant OTS guidance, and the Bank’s current and future
activities and operations; (ii) the Bank’s compliance with its BSA Compliance
Program; and (iii) the Bank’s compliance with the BSA Laws and Regulations
(hereafter referred to as the BSA Audit). The BSA Audit must include adequate
levels of transactional testing to corroborate the audit findings, procedures
for documenting completion of appropriate corrective actions by Management, and
reassessment of any department, operation, branch or area identified as having
less than adequate BSA compliance within six (6) months following the completion
of each BSA Audit. Within thirty (30) days after completion of the BSA Audit,
the Board will review the results of the BSA Audit, adopt appropriate corrective
actions and timeframes to address identified deficiencies or weaknesses, require
Management to fully implement

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the corrective actions adopted by the Board, and ensure the timely completion of
all required corrective actions. The Board’s review, discussions and required
corrective actions shall be fully detailed in the appropriate Board meeting
minutes. A copy of the BSA Audit procedures, scope and findings, and the
relevant meeting minutes detailing the Board’s review, shall be provided to the
Regional Director within ten (10) days after the Board’s review of the BSA Audit
findings.

  g.   The Board shall ensure that the annual BSA Audit required by
Paragraph 2.f. above includes a review and assessment of the adequacy and
effectiveness of the CIP Policy and KYC Policy. The review shall consider,
without limitation, the adequacy and effectiveness of due diligence procedures
and customer profiles for customer groups with heightened BSA and AML risk, as
identified by the Bank, including, non-US resident accounts, commercial and
business accounts, customers with significant wire transfer activity, and
customers generating more than five (5) currency transaction report filings per
year. The review shall assess the adequacy and effectiveness of the CIP Policy
and KYC Policy for the Bank and for each individual branch, including an
assessment of the adequacy and reliability of data and information obtained and
maintained by the Bank and each individual branch, and identify any
deficiencies, weaknesses or noncompliance with the CIP Policy, KYC Policy or
applicable laws and regulations.     h.   In addition to the BSA Audit required
by Paragraph 2.f. above, the Board shall require Management to engage a
qualified independent outside third party to conduct annual independent tests of
the Bank’s compliance with the BSA Compliance Program and the BSA Laws and
Regulations. Each annual independent test shall comply with the requirements
contained in the Federal Financial Institutions Examination Counsel’s BSA/AML
Examination Manual.

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3. The Board and Management shall ensure that all deficiencies, weaknesses and
violations of law or regulation identified in the Bank’s 2004 Examination have
been corrected, as directed therein, except where such direction is modified or
changed by the terms of this C&D Order. Further, the Board and Management of the
Bank shall take immediate action to cause the Bank to comply with the terms of
this C&D Order.
Board Compliance Committee
4. Within thirty (30) days of the Effective Date of this C&D Order, the Board
shall appoint a committee comprising three (3) or more Directors, the majority
of whom shall be independent of Management, to monitor and coordinate the Bank’s
compliance with the provisions of this C&D Order and the completion of any
remaining corrective action required in the 2004 Examination (the Regulatory
Compliance Committee).
5. Within forty-five (45) days after the end of each calendar quarter, the
Regulatory Compliance Committee shall submit a written progress report to the
Board detailing the actions taken or required to be taken to comply with each
provision of this C&D Order and the actions required by the 2004 Examination, as
well as the results and status of those actions.
6. Within sixty (60) days after the end of each calendar quarter, the Board
shall submit to the Regional Director: (i) a copy of the Regulatory Compliance
Committee’s quarterly progress report required by Paragraph 5 above, with any
additional comments made by the Board; and (ii) a written certification that
each Director has reviewed the report.
Compliance with Order
7. All policies, procedures, corrective actions, plans, programs, reviews and
systems required by this C&D Order (collectively, Policies and Procedures) shall
conform to all applicable statutes, regulations, OTS policy and guidance. The
Board shall submit copies
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of all Policies and Procedures required by this C&D Order to the Regional
Director within the timeframes specified or, in the event a timeframe is not
specified, within thirty (30) days after adoption by the Board. The Board shall
revise such Policies and Procedures as required by the Regional Director within
thirty (30) days of receipt of written direction from the Regional Director. The
Policies and Procedures, as modified consistent with the written direction of
the Regional Director, shall be incorporated into this C&D Order and any
deviation from such Policies and Procedures shall be a violation of this C&D
Order.
Definitions
8. All technical words or terms used in this C&D Order for which meanings are
not specified or otherwise provided by the provisions of this C&D Order shall,
insofar as applicable, have meanings as defined in Chapter V of Title 12 of the
Code of Federal Regulations, Part 103 of Chapter I of Title 31 of the Code of
Federal Regulations, the BSA, the Home Owners Loan Act (HOLA), the FDIA, OTS
Memoranda or other published OTS guidance. Any such technical words or terms
used in this C&D Order and undefined in said Code of Federal Regulations, the
BSA, the HOLA, the FDIA, OTS Memoranda, or other published regulatory guidance
shall have meanings that are in accordance with the best custom and usage in the
savings and loan industry.
Successor Statutes, Regulations, Guidance, Amendments
9. Reference in this C&D Order to provisions of statutes, regulations, OTS
Memoranda, and other published regulatory guidance shall be deemed to include
references to all amendments to such provisions as have been made as of the
Effective Date and references to successor provisions as they become applicable.
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No Violations Authorized; OTS Not Restricted
10. Nothing in this C&D Order or the Stipulation shall be construed as:
(i) allowing the Bank to violate any law, rule, regulation, or policy statement
to which it is subject, or (ii) restricting or estopping the OTS from taking any
action(s) that it believes are appropriate in fulfilling the responsibilities
placed upon it by law including, without limitation, any type of supervisory,
enforcement or other action that the OTS determines to be appropriate, arising
out of matters described in the most recent Report of Examination, or based on
other matters.
Time Limits; Effect of Headings; Separability Clause; Stipulation Incorporated
11. Time limitations for compliance with the terms of this C&D Order run from
the Effective Date, unless otherwise noted.
12. The section and paragraph headings herein are for convenience only and shall
not affect the construction hereof.
13. In case any provision in this C&D Order is ruled to be invalid, illegal or
unenforceable by the decision of any court of competent jurisdiction, the
validity, legality and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby, unless the Regional Director in
his/her sole discretion determines otherwise.
14. The Stipulation is made a part hereof and is incorporated herein by this
reference.
Effective Date; Duration
15. This C&D Order is and shall become effective on the date it is issued, i.e.,
the Effective Date as shown on the first page hereof. This C&D Order (including
the related Stipulation) shall remain in effect until terminated, modified or
suspended, in writing by the OTS, acting through its Director, Regional Director
or other authorized representative.

            OFFICE OF THRIFT SUPERVISION
      By:   /s/ John E. Ryan        John E. Ryan        Regional Director     

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