FDIC Sues 17 Ex-Directors of Failed Atlanta Bank

August 25, 2011

Federal bank regulators have sued 17 former directors and officers of Silverton Bank, accusing them of gross negligence and corporate waste.

The Federal Deposit Insurance Corp. accuses the Atlanta bank in the lawsuit filed Monday of slipshod lending practices and for spending lavishly as the bank’s condition worsened and the economy weakened.

The Atlanta Journal-Constitution reports the FDIC cited a $35 million headquarters building called The Medici, with 26 conference rooms. The lawsuit says the bank spent millions more for an aircraft hangar and two airplanes. The newspaper’s attempt to reach defendants in the case was unsuccessful.

The suit contends the bank’s former CEO glossed over problems and that the bank pursued growth in real estate loans as the economy declined.

The FDIC seeks $71 million in damages.

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