UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933

Release No. 9646 / September 11, 2014

SECURITIES EXCHANGE ACT OF 1934

Release No. 73076 / September 11, 2014

ACCOUNTING AND AUDITING ENFORCEMENT

Release No. 3582 / September 11, 2014

ADMINISTRATIVE PROCEEDING

File No. 3-16098

In the Matter of

Wilmington Trust Corporation,

Respondent.

ORDER INSTITUTING CEASE-AND-DESIST 

PROCEEDINGS PURSUANT TO SECTION 

8A OF THE SECURITIES ACT OF 1933 AND 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING REMEDIAL 

SANCTIONS AND A CEASE-AND-DESIST 

ORDER 

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate that ceaseand-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act 

of 1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 (“Exchange 

Act”) against Wilmington Trust Corporation (“Respondent”). 

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Ceaseand-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of 
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the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a 

Cease-and-Desist Order (“Order”), as set forth below. 

III.

On the basis of this Order and Respondent’s Offer, the Commission finds1 that

SUMMARY

These proceedings arise out of false and misleading disclosures by Wilmington Trust 

Corporation (“Wilmington Trust” or the “Bank”) concerning its accruing loans past due 90 days or 

more over multiple quarters during 2009 and 2010, its nonaccruing loans in the third quarter of 

2009, and its reserves for loan losses in the third and fourth quarters of 2009. Wilmington Trust 

was the public holding company for Wilmington Trust Company, a retail and commercial bank 

headquartered in Wilmington, Delaware. By mid-2009, many of the construction projects 

underlying the Bank’s loans stalled or failed to sell or lease when completed. At the same time, an 

increasing number of the Bank’s loans to these projects “matured,” i.e., the loan’s term expired 

without being extended, modified or paid off, such that the principal balance of the loan was 

contractually due. 

The Bank had deficient underwriting and loan monitoring controls and failed, for these and 

other reasons, to take appropriate action on many of its matured loans for protracted periods of 

time. As a result, the Bank had a large volume of loans that were past due, for reasons of maturity, 

90 days or more. Generally Accepted Accounting Principles (“GAAP”) requires that banks 

disclose loans that are past due 90 days or more and still accruing,

2 and Regulation S-K (through 

SEC Industry Guide 3) further indicates that banks should disclose their “accruing loans which are 

contractually past due 90 days or more as to principal or interest payments.”3 However, rather than 

disclose as past due loans that were matured (but purportedly “current for interest”), the Bank

negligently and routinely omitted such loans from its disclosures of past due loans, based on 

unwritten, informal criteria that were loosely applied and liberally adjusted. 

 1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding. 

2 See Accounting Standards Codification (“ASC”) 310-10-50-7(b). References to GAAP in 

this Order are to standards in effect at the time of the misconduct. In July 2009, the Financial 

Accounting Standards Board promulgated its “Accounting Standards Codification,” effective for 

fiscal quarters ending after September 15, 2009, which changed the applicable citation standards 

but not the substantive GAAP requirements.

3 17 C.F.R. § 229.303; SEC Industry Guide 3, Statistical Disclosure by Bank Holding 

Companies, 57 F.R. 36442. 
3

As a result, the Bank omitted almost $339 million in matured loans past due 90 days or 

more from its disclosures in its filings with the Commission for the third quarter of 2009. The 

Bank further omitted over $330 million in matured loans past due 90 days or more from its 

disclosures in its filings for the year ended 2009, including its Form 10-K. The Bank then 

incorporated its false and misleading Form 10-K for 2009 by reference into the offering materials 

for a February 2010 public offering in which the Bank sold $287 million of its common stock. 

At the end of 2009, amidst increasing regulatory scrutiny, the Bank decided to address its

misreporting of past due loans beginning in 2010; however, the Bank negligently implemented 

various practices that had the effect of avoiding full disclosure of the problems with matured loans 

in its portfolio. These practices included an “extension push” to extend the maturity dates of 

matured and maturing loans. This resulted in multiple short-term extensions for a high volume of 

loans even when the Bank did not have updated financial and collateral information for the loans, 

had not performed appropriate analysis for re-underwriting, or was engaged in difficult 

negotiations with borrowers concerning their matured loans. Wilmington Trust also failed to 

disclose in its Form 10-K, as required by Regulation S-K, that its matured, maturing and short-term 

extended commercial loan portfolio represented a material, but unquantified, risk to the stability of 

the Bank. 

Despite modifications to its past due reporting practices in the first and second quarters of 

2010, the Bank negligently continued to omit significant volumes of matured past due loans from 

its disclosures, repeated its false disclosures from prior periods, and made misleading supplemental 

disclosures concerning the Bank’s past due reporting and matured loan extension practices.

 

Finally, in its Form 10-Q for the third quarter of 2009 and its Form10-K for 2009, the Bank 

also negligently failed, as required by GAAP, to properly disclose significant increases in the 

Bank’s nonaccruing loans according to its policy, and to properly account for updated collateral 

values and significant declines in commercial loan risk ratings in its loan loss provisions and 

reserves. 

RESPONDENT

1. Wilmington Trust was, during the relevant period, a bank holding company based 

in Wilmington, Delaware and incorporated under the laws of the State of Delaware. Its securities 

were registered with the Commission pursuant to Section 12(b) of the Exchange Act, and its 

common stock traded on the New York Stock Exchange under the symbol “WL.” On May 16, 

2011, Wilmington Trust was acquired by M&T Bank Corporation (“M&T”) in a stock-for-stock 

transaction, and Wilmington Trust’s securities were removed from registration. Wilmington Trust 

survives as a subsidiary of M&T.

OTHER RELEVANT ENTITY

2. M&T is a bank holding company headquartered in Buffalo, New York. On May 

16, 2011, M&T acquired Wilmington Trust in a stock-for-stock transaction. M&T is the 
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successor-in-interest to Wilmington Trust. M&T did not commit any of the misconduct that is the 

subject of this Order, all of which preceded M&T’s acquisition of Wilmington Trust. 

FACTS

Past Due Loan Disclosure Guidelines

3. Under GAAP, banks are required to disclose their past due loans. Accounting 

Standards Codification (“ASC”) Topic 310-10-50 stipulates certain disclosure requirements for 

loans. Specifically, ASC 310-10-50-7(b) requires disclosure of a bank’s recorded investment in 

loans “past due 90 days or more and still accruing.”4

4. Regulation S-K of the Securities Act, Item 303(a), requires the Management 

Discussion and Analysis (“MD&A”) sections of an issuer’s annual filings to disclose any 

“information that the registrant believes to be necessary to an understanding of its financial 

condition [or] changes in its financial condition.” Item 303(b) requires quarterly filings to discuss 

material changes in information described in Item 303(a).5

 Instruction 13 to Item 303(a) directs 

bank holding companies to the information called for by SEC Industry Guide 3 (“Guide 3”), which 

is a policy of the Division of Corporation Finance; the Commission has not adopted the Guide as a 

rule.

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 Among other statistical disclosures, Item III.C.1 of Guide 3 specifies disclosure of “accruing 

loans which are contractually past due 90 days or more as to principal or interest payments.”

Background to the Bank’s Past Due Loans Disclosure Violations 

5. From at least 2006 through the third quarter of 2009, the Bank routinely removed, 

or, using the Bank’s terminology, “waived” loans from certain internal reports and from its public 

disclosures of accruing loans past due 90 days or more if the loan was matured, current for interest 

and either 1) a loan managed by the Bank’s Loan Recovery (i.e., workout) unit; or 2) a loan that 

the Bank claimed its loan officers were “working on” extending. The matured workout loans were 

waived automatically, with no further requirements; for a non-workout loan, the loan officer was 

asked summarily to confirm that he or she was “working on” an extension and the loan was then

waived. No documents or actual progress toward an extension were required and, in practice, loan 

officers could simply note that the loan was matured, current for interest and should be waived. 

The Bank did not have written policies or procedures governing its past due reporting process or its 

waiver practices.

6. On the Bank’s internal “Delinquency Report,” showing past due loans, the Bank’s 

credit department indicated past due loans that would be waived. The Bank’s finance department 

 4 This standard was preceded by AICPA SOP 01-06 ¶13(g), which is substantively 

identical.

5 17 C.F.R. § 229.303.

6 SEC Industry Guide 3, Statistical Disclosure by Bank Holding Companies, 57 F.R. 

36442. 
5

then removed the indicated loans from a second internal report, the “Past Due and Nonperforming 

Loans Report.” This report was then incorporated in the Bank’s “accruing loans past due 90 days 

or more” table disclosure in its SEC filings. The summary past due loan amount also was 

disclosed in the notes to the financial statements in the Bank’s Form 10-K annual reports. 

7. Equities and credit ratings analysts viewed loans 90 days or more past due as 

nonperforming, even if the Bank maintained them as unimpaired loans. High levels of past due 

loans were interpreted by the market as a signal of probable increased credit deterioration. 

8. As early as August 2007, the Bank recognized that it had a mounting problem with 

matured loans that it needed to resolve. As the real estate market softened, the Bank was

concerned by the growing volume of waived matured loans and about potential scrutiny from 

auditors, examiners and others concerning the waivers. However, even where loan officers had not 

taken meaningful steps toward extension, the Bank still waived such loans and omitted them from 

its public reporting. 

9. As the real estate market continued to decline, more loans began to mature without 

repayment or completion of the underlying projects. Updated appraisals and financial statements 

required for re-underwritten extensions were also revealing significant deterioration. Borrowers 

balked at providing updated information and at the more onerous terms required by re-underwritten 

extensions. Some loan officers, particularly those managing the Bank’s Delaware Commercial 

Real Estate (“CRE”) portfolio, were reluctant to pursue the required documents to support reunderwritten extensions because of concerns that the underwriting analysis and new terms would 

lead to borrower nonperformance and loan downgrades. Loan officers voiced their concerns about 

this, and their related inability to properly underwrite loan extensions. The Bank was aware that 

the volume of matured loans it claimed was “in the process of extension” rose significantly through 

2008 and into 2009.

10. The Bank purported to comply with GAAP and the disclosures required by 

Regulation S-K and called for by Industry Guide 3, but failed to do so accurately and completely. 

In all relevant filings, the Bank included in its MD&A section concerning credit risk a table 

disclosing its purported volume of accruing loans past due 90 days or more and supplemental 

disclosures describing them. It also disclosed the purported volume of accruing past due loans in 

the notes to the financial statements in its Form 10-Ks. In each period the Bank also claimed in its 

filings that it mitigated credit risk by employing “rigorous loan underwriting standards,” 

disciplined monitoring of its loan portfolio, and regular “review [of] all past due loans.” 

Understated Past Due Loans Disclosures in the Third Quarter of 2009 

11. On or about October 7, 2009, the Bank waived $338.9 million in matured, interest 

current loan balances that were accruing but past due 90 days or more from the Bank’s 

Delinquency Report, and subsequently removed the waived loans from the Bank’s Past Due and 

Nonperforming Loans Report. On October 23, 2009, the Bank released its earnings and filed its 

Form 8-K, which incorporated the past due numbers from the Past Due and Nonperforming Loans 
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Report, omitted the $338.9 million in matured loans, and disclosed only $38.7 million in accruing 

loans past due 90 days or more.

12. During the third quarter of 2009 and prior to the filing of the Bank’s Form 10-Q, 

certain senior managers voiced their concerns to senior officers about the growing number of 

matured loans that the Bank was claiming were “in the process of extension” but had not, in 

reality, been extended for protracted periods of time. Certain Bank personnel were concerned 

about the possibility of scrutiny from the Bank’s auditors and bank examiners relating to its 

treatment of matured loans. 

13. Concerns around matured and waived loans became heightened in late October 

2009, after the Bank entered into an agreement with the Federal Reserve Bank of Philadelphia 

(“FRB”) that required Bank management to provide enhanced reporting to the FRB of loans “past 

due as to principal or interest more than 90 days.” In response, prior to the filing of the third 

quarter Form 10-Q, the Bank initiated several steps, discussed below, to begin phasing out its

waiving of matured loans, and to attempt to extend some of these loans by year end. 

14. Nevertheless, the Bank filed its Form 10-Q on November 9, 2009, again disclosing 

only the $38.7 million in accruing past due loans and improperly omitting the $338.9 million that 

had been waived. The supplemental disclosures did not provide any information about the Bank’s 

matured or waived loans. 

Understated Past Due Loans Disclosures and Extension Push in the Fourth Quarter and Year End 

2009 

15. In the fourth quarter, the Bank decided to continue to waive matured loans if an 

extension was “internally approved.” The new criteria purported not to allow a non-workout loan 

to be waived where an extension was just being “worked on,” as had sufficed in earlier quarters. 

Accordingly, a matured past due loan would be waived from the noted internal reports and omitted 

from public filings if the Bank had approved a lending officer’s proposal to extend the loan,

regardless of whether the loan had actually been extended by the borrower. The Bank continued 

the automatic waiver of matured, current for interest workout loans. 

16. The Bank initiated an abbreviated extension process to facilitate the “internal 

approval” of short-term extensions of matured loans by year end. In combination with the 

amended waiver practice, this allowed loans for which the Bank lacked updated appraisals or 

financial documentation or was still negotiating terms with the borrower either to be extended 

temporarily or “internally approved” and waived so that they would not be reported as past due. 

The Bank was aware that executing long-term extensions would be difficult particularly for its 

Delaware CRE loans, because poor market conditions meant the Bank needed borrowers to pay 

down principal or increased interest rates as a part of long-term loan modifications. Certain of the 

Bank’s senior officers and managers were informed that these borrowers were in distressed 

situations that could not be quickly remedied, and they recognized that the failure to accomplish 

long-term modifications could result in the Bank and its “shareholders get[ting] the crap knocked 

out of us by analysts and regulators.”
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17. In early January 2010, the Bank prepared a Delinquency Report indicating that 

$330.2 million in matured loans 90 days or more past due would be waived; of this amount, $177.3 

million was more than 180 days past due. Accordingly, prior to releasing its earnings, the Bank

was aware that the $330.2 million in waived past due loans would be omitted from the Bank’s 

public disclosures. A Bank manager raised concerns that the waived loans would be “a disclosure 

issue” for the Bank’s public reporting. The Bank knew that many of the waived loans would 

require significant structural modifications if they were to be extended, and that the waived loans 

required thorough analysis and new maturity dates commensurate with the level of risk posed by 

the loan. of the Bank also knew that it did not expect to be complete this process until the second 

quarter of 2010. The Bank was aware that it had an additional $432 million in loans that would 

mature in the first quarter of 2010 that would also require the same process if they were to be 

extended.

18. Nevertheless, the Bank released its earnings and Form 8-K on January 29, 2010,

disclosing only $30.6 million in accruing loans past due 90 days or more and omitting the $330.2 

million in matured past due loans. The Bank’s Form 10-K for 2009, which was filed on February 

22, 2010, again disclosed only $30.6 million accruing loans past due 90 days or more in both the 

footnotes to the financial statements and in the MD&A. Neither the earnings release nor the Form 

10-K disclosed the Bank’s problems with its matured, maturing and temporarily extended loan 

portfolio. 

19. In mid-January 2010, shortly before releasing its earnings, the Bank decided to 

attempt to raise additional capital. On February 22, 2010, the Bank announced its common stock 

offering; the false and misleading Form 10-K was incorporated by reference in the final Prospectus 

Supplement, which was filed on February 25, 2010. In the offering, which closed on March 2, 

2010, the Bank sold $287 million in common stock, netting $274 million after costs and 

commissions.

Understated Past Due Loans Disclosures and Extension Push in the First Quarter of 2010

20. In the first quarter of 2010, the Bank continued to phase out the waiver practice by 

determining that an “internal approval” of a loan extension would no longer suffice to waive

matured loans from certain of the Bank’s internal reports and its public past due reporting; rather, 

in order to be waived, a valid extension document had to be signed by the Borrower and received 

by the Bank. However, the Bank decided that matured workout loans would still be waived

automatically and, as a result, excluded from the Bank’s public disclosures of accruing loans past 

due 90 days or more. 

21. The Bank had uncovered significant issues in ongoing reviews of matured and 

maturing loans that were resulting in the Bank’s continued inability to fully analyze and 

appropriately re-underwrite those loans. Bank staff recommended that such loans be eligible for 

yet additional short-term extensions on an expedited basis without full underwriting analysis. 
8

22. As described above, a large number of Delaware CRE loans had been waived from 

past due reporting at the end of the fourth quarter of 2009 on the basis that the Bank had “internally 

approved” extension proposals; however, many of these loans were not actually extended – i.e., 

there was no extension agreement executed between the Bank and the borrower – for most of the 

first quarter. In the last two days of the first quarter of 2010, the Bank “internally approved” new 

extension proposals for at least 117 of these loans, because the Bank needed yet more time to do 

appropriate analysis and gather documentation to re-underwrite the loans. The majority of these 

extension proposals contemplated short-term extensions of loans that had been waived from past 

due reporting in multiple prior quarters; some of the loans had been matured for over a year. 

23. Notwithstanding the Bank’s expedited extension practices, at quarter end, a 

significant volume of matured loans remained. Despite its purported use of stricter waiver criteria, 

the Bank subsequently waived at least $48.1 million of these matured loans past due 90 days or 

more from certain of its internal reports. The Bank’s press release reporting earnings and Form 8-

K (filed on April 23, 2010) and its Form 10-Q (filed on May 10, 2010) both omitted the $48.1 

million in waived loans and disclosed only $39.7 million in accruing loans past due 90 days or 

more. 

24. The Bank’s public filings for the first quarter also presented the materially 

understated accruing past due loan amounts previously reported for the fourth quarter of 2009 (and 

other periods) for comparison, and did not disclose that the current period’s past due loans were 

based on materially different criteria than in prior periods. The earnings press release and Form 

10-Q noted an increase in past due loans and stated that the increase was due to matured loans for 

which “underwriting extensions” were in progress. However, there was no disclosure to inform 

investors of the Bank’s significant, ongoing problems with its matured and short-term extended 

loans. This information would have been important to investors to know, because without it they 

could not understand the true condition of the Bank’s loan portfolio. 

Understated Past Due Loans Disclosures in the Second Quarter of 2010 

25. The Bank continued to adjust its criteria for waiving loans and, after the second 

quarter of 2010, decided that matured, interest current workout loans should no longer be waived. 

In effect, by this point, the Bank had changed its practices such that all matured loans that were 

actually past due at the end of the quarter were to be reported as past due. 

26. Before the Bank filed its current and quarterly reports for the second quarter of 

2010, the Bank was aware that the market was interested in banks’ loan extension and restructuring 

practices, including the practice of extending loans multiple times. The Bank was aware that a 

large volume of both its matured loans that were reported as past due as well as loans that were 

current had not been fully analyzed or appropriately re-underwritten, but had been waived or 

extended multiple times. 

27. Nevertheless, the Bank’s disclosures of accruing loans past due 90 days or more in 

its press release reporting its earnings and its Form 8-K (filed on July 23, 2010) and again in its 

Form 10-Q (filed on August 5, 2010), omitted $24 million in matured past due loans that had 
9

extensions that were executed after the close of the quarter. The filings also presented the 

materially understated accruing past due loan amounts previously reported for the fourth quarter of 

2009 (and other periods) for comparison. There were no disclosures about the high volumes of 

multiple extensions without re-underwriting or waivers the Bank had granted. 

28. Although the Bank was aware of the effect of its changed waiver practices (i.e., the 

phasing out of matured loan waivers) on the past due loan disclosures over time, the Bank did not 

disclose the changes in its practices and made no effort to analyze the impact the changed practices 

would have had in prior periods. In addition, during the second quarter conference call, the Bank’s 

statements concerning its past due reporting were misleading and the Bank also omitted 

information necessary to make the statements not misleading. The Bank’s statements and 

omissions, considered together, were materially misleading because they obscured the true 

condition of the Bank’s credit portfolio. 

Understated Nonaccruing Loans Disclosures in Form 10-Q for the Third Quarter of 2009 

29. According to the Bank’s nonaccrual policy, loans that were rated “substandardaccruing” and also had interest payments being paid by an interest reserve or a second loan to the 

same borrower were to be classified as nonaccruing (and therefore impaired according to the 

Bank’s application of ASC 310). In early October 2009, after the end of the third quarter, a senior 

Bank manager responsible for nonaccrual recommendations identified three construction projects 

that had loans that fit these criteria as of the third quarter of 2009. The three loans had total 

outstanding balances of $24.1 million. The manager concluded that the loans for all of these 

projects required nonaccrual classification, based on the Bank’s nonaccrual policy and conditions 

that existed as of the third quarter of 2009. 

30. The manager informed other senior Bank officers that these loans required 

nonaccrual (and thus, impaired) classification in late October 2009, and informed them that her 

belated identification of these loans as nonaccruing was due to the Bank’s ineffective process for 

tracking interest reserve loans. The Bank approved the manager’s nonaccrual recommendations,

which totaled $24.1 million out of $36 million of nonaccrual classifications approved.

31. The GAAP standard governing subsequent events, ASC 855-10-25-1, states that 

“An entity shall recognize in the financial statements the effects of all subsequent events that 

provide additional evidence about conditions that existed at the date of the balance sheet, including 

the estimates inherent in the process of preparing financial statements.” The conditions underlying 

the nonaccrual designations – the loans’ substandard ratings, and the fact that their interest was 

being paid via interest reserve – existed as of the date of the third quarter of 2009 balance sheet. 

Therefore, in accordance with GAAP, the nonaccruals should have been recognized in the third 

quarter financial statements. 

32. On November 9, 2009, the Bank filed its Form 10-Q for the third quarter. Although 

the Bank stated in its Form 10-Q that it had evaluated subsequent events through the date of the 

filing, the Bank did not account for the three loans as nonaccruing in its Form 10-Q. The Bank 

reported a total of $365.9 million in nonaccrual loans. The additional $24.1 million in nonaccruing 
10

loans would have represented a material 6.6% increase in the total nonaccruals for the quarter. 

Properly including this amount of nonaccruing loans would have caused the quarter over quarter 

difference in reported nonaccrual loans to increase materially, from $67.1 million to $91.2 million, 

or a difference of 35.9%. 

Understated Loan Loss Provision and Reserves in Form 10-Q for the Third Quarter of 2009 

33. The Bank’s Form 10-Q filed on November 9, 2009 improperly failed to incorporate 

the information from four newly-obtained appraisals into its calculation of the Bank’s loan loss 

provision and reserves. Significantly prior to the filing date, the Bank’s appraisal department 

received appraisals that reflected material collateral value declines for impaired loans related to 

four construction projects, including two described in Paragraph 29 above.

34. However, Wilmington Trust’s deficient internal controls prevented timely 

consideration of the effect of the updated collateral values on the Bank’s reserve. Credit Risk 

Management staff tasked with allowance calculations did not obtain the updated appraisals in a 

timely fashion and there were no effective procedures to assure that Credit Risk Management staff 

were informed of updated collateral value information that was received after the end of the 

quarter, but prior to filing the periodic SEC reports. Nor did the Bank’s disclosure controls assure 

that updated collateral values that Credit Risk Management staff received prior to period public 

filings were appropriately considered for subsequent events reporting according to GAAP. 

35. Taken together, the updated appraisals for impaired loans received prior to the 

filing of the third quarter 2009 Form 10-Q required a supplemental provision to the reserve of 

$12.8 million. This was a material understatement, because the additional required provision 

would have increased the recorded $38.7 in provision to $51.5 million, or 33%, and would have 

increased the $16.6 million loss before income taxes and noncontrolling interest to $29.4 million, 

or 77%.

Understated Loan Loss Provision and Reserves in the Fourth Quarter 2009 Earnings Release and 

10-K for 2009 

36. In January 2010, before the Bank issued its fourth quarter 2009 earnings press 

release and filed its Form 8-K, the Bank’s ongoing review of its Delaware CRE projects revealed 

deterioration trajectories in ten highly significant borrower relationships. A senior Bank manager 

concluded, and informed certain senior officers, that downgrades were required for the ten 

relationships, which would result in an “overall provision increment ... [of] $10.5MM.” The loan 

reviews also resulted in the identification of 20 other loans that required downgrades which would 

have required an additional provision of $1.6 million. The Bank was aware that these downgrades 

were not reflected in the loan loss provision and reserves that previously had been calculated for 

the fourth quarter. 

37. The Bank represented to its Board of Directors that the loan reviews that resulted in 

the downgrades were rigorous and complete with respect to the relevant loans. However, a senior 

Bank officer directed that the downgrades not be formalized, and therefore neither the downgrades 
11

nor the increased reserves described in Paragraph 36 above were incorporated into the Bank’s 

quarterly earnings release and Form 8-K or its Form 10-K, which were filed on January 29, 2010 

and February 22, 2010, respectively. 

38. The total provision supplement associated with the downgrades was $12.1 million. 

In both of its SEC filings, the Bank recognized a provision of $82.8 million for the fourth quarter; 

the additional $12.1 million in provision would have increased it materially, to $94.9 million, or 

by14.6%. The Bank recorded a loss before income taxes and noncontrolling interest of $37.3 

million; the increased provision would have deepened the loss by 30%. 

VIOLATIONS

 

As a result of the conduct described above, Wilmington Trust violated:

a. Section 17(a)(2) of the Securities Act, which prohibits, directly or indirectly, in the 

offer or sale of securities, obtaining money or property by means of any untrue 

statement of a material fact or any omission to state a material fact necessary in order

to make the statements made, in light of the circumstances under which they were 

made, not misleading; 

b. Section 17(a)(3) of the Securities Act, which prohibits any person from engaging in 

any transaction, practice, or course of business which operates or would operate as a 

fraud or deceit upon the purchaser in the offer or sale of securities;

c. Exchange Act Section 13(a) and Rules 13a-1, 13a-11, 13a-13 and 12b-20 thereunder, 

which require that every issuer of a security registered pursuant to Exchange Act 

Section 12 file with the Commission information, documents and annual and 

quarterly reports as the Commission may require and mandate that periodic reports 

contain such further information as may be necessary to make the required statements 

not misleading;

d. Exchange Act Section 13(b)(2)(A), which requires reporting companies to make and

keep books, records and accounts which, in reasonable detail, accurately and fairly 

reflect their transactions and dispositions of their assets; and

e. Exchange Act Section 13(b)(2)(B), which requires all reporting companies to devise 

and maintain a system of internal accounting controls sufficient to provide reasonable 

assurances that transactions are recorded as necessary to permit preparation of 

financial statements in accordance with GAAP.

IV.

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Wilmington Trust’s Offer.
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Accordingly, it is hereby ORDERED that:

A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, 

Respondent Wilmington Trust shall cease and desist from committing or causing any violations 

and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act and Sections 

13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 

13a-13 thereunder.

B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of 

$16,000,000.00 and prejudgment interest of $2,545,896.16, for a total of $18,545,896.16, to the 

Securities and Exchange Commission. If timely payment is not made, additional interest shall 

accrue pursuant to SEC Rule of Practice 600. Payment must be made in one of the following 

ways:

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to: 

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard

Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a cover letter identifying 

Wilmington Trust as a Respondent in these proceedings, and the file number of these proceedings; 

a copy of the cover letter and check or money order must be sent to Michael J. Osnato, Jr., Chief, 

Complex Financial Instruments Unit, Division of Enforcement, Securities and Exchange 

Commission, Brookfield Place, 200 Vesey Street, Suite 400, NY, NY 10281. 

By the Commission.

Jill M. Peterson

Assistant Secretary