WASHINGTON – The Office of the Comptroller of the Currency
announced today that it has entered into agreements with the law firm that
represented the failed First National Bank of Keystone, Keystone, West Virginia,
and with one of the firm’s partners. In
signing the agreements, Kutak Rock, LLP agreed to take certain actions with
respect to the firm’s representation of insured depository institutions, and
Kutak Rock partner Michael T. Lambert agreed not to provide legal services to
insured depository institutions.
The OCC closed the First National Bank of Keystone and
appointed the Federal Deposit Insurance Corporation as receiver on September 1,
1999, after examiners discovered that the bank was insolvent and had overstated
its assets.
Kutak Rock LLP, including Mr. Lambert, performed legal
services for Keystone at various times during the period from 1993 until
September 1, 1999. Mr. Lambert served
as the partner in charge of the firm’s representation of Keystone. The OCC was prepared to allege, among other
things, that Mr. Lambert and the firm failed to inform the bank’s board of
directors of important information about bank management’s activities and had
conflicts of interest involving the firm’s representation of the bank and other
clients.
In consenting to the agreement, which will remain in effect
for three years, Kutak Rock committed to complying with all federal banking
laws and to ensuring that firm attorneys representing insured depository
institutions have sufficient experience in banking matters. The firm also agreed to correct any
documents that it prepares on behalf of a banking client if the firm learns
that the document omits or misstates material facts, and if it knows that the
document will be, or has been, submitted to or relied upon by a federal banking
agency. Furthermore, the firm agreed
not to represent both an insured depository institution and any other client in
the same transaction if such representations would cause a conflict of interest.
In addition, the agreement provides that a firm attorney
must advise the employees, officers, or directors of insured depository
institution clients of their fiduciary duties to the institution. The firm also agrees to report potential
misconduct by bank insiders to senior management and, if necessary, to the
institution’s board of directors, unless the insider takes appropriate action.
In consenting to his agreement with the OCC, Mr. Lambert
agreed not to provide legal services to any insured depository
institution. Also, if Mr. Lambert
leaves the firm and joins an insured depository institution, another law firm,
or any business that performs legal services for an insured depository
institution in the next five years, he will provide a copy of the agreement to
his new employer and notify the OCC and the FDIC of his change in
employment.
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The OCC charters, regulates and examines approximately
2,200 national banks and 52 federal branches of foreign banks in the U.S.,
accounting for more than 54 percent of the nation’s banking assets. Its
mission is to ensure a safe and sound and competitive national banking system
that supports the citizens, communities and economy of the United States.
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