Opinion ID: 717547
Heading Depth: 2
Heading Rank: 4

Heading: The FDIC's Administrative Action

Text: 21 On December 22, 1992, the FDIC issued a Notice of Intention to Prohibit from Further Participation (Notice), pursuant to 12 U.S.C. § 1818(e)(1). 4 The Notice named as respondents Hutensky and four other former officers and directors of First Central and Central. The Notice contained one charge against Hutensky, based on his conduct in connection with the modification of the B & H line of credit at the August 27, 1990 meeting of Central's board. On May 17, 1993, the Notice was amended to include a charge against Hutensky based on his involvement with the Harding loan. On November 24, 1993, the Notice again was amended to include a charge against Hutensky based on his involvement with the Reveruzzi loan. 22 All the respondents named in the Notice except for Hutensky consented to the entry of prohibition orders. Thereafter, a hearing was held before an administrative law judge (ALJ) on the charges against Hutensky. The hearing was conducted over a period of eight days in January and February of 1994. On November 28, 1994, the ALJ issued his Recommended Decision, finding that Hutensky violated Regulation O, 5 breached his fiduciary duties, and engaged in unsafe and unsound banking practices, and recommending that a prohibition order be issued against Hutensky. The FDIC's Enforcement Counsel and Hutensky filed exceptions to the ALJ's Recommended Decision. 23 On May 3, 1995, the FDIC issued a Decision and Order, adopting and incorporating the ALJ's Recommended Decision and the exceptions of the FDIC's Enforcement Counsel, and rejecting the exceptions of Hutensky. The FDIC found that there was substantial evidence to support the issuance of a prohibition order against Hutensky. The FDIC determined that Hutensky's conduct in connection with the Harding and Reveruzzi loans and the modification of the B & H line of credit violated Regulation O. Hutensky's actions also were found to have constituted breaches of his fiduciary duties and unsafe and unsound banking practices. The FDIC further determined that, as a result of Hutensky's actions, losses were sustained by the FDIC, as Receiver for Central. Finally, the FDIC found that Hutensky's actions manifested willful disregard for the safety and soundness of the banks as well as personal dishonesty. Accordingly, the FDIC ordered, inter alia, that Hutensky shall not participate in any manner in the conduct of the affairs of any insured depository institution without the prior written consent of the appropriate federal agencies. Hutensky filed a Petition for Review of the FDIC's Decision and Order.