"Our view is that this is the latest example [of] the Federal Deposit Insurance Corp. trying to blame small-town community bankers for the financial crisis," said Alston & Bird attorney Theodore Sawicki, who is defending Freedom Bank officials from charges of negligence and breaches of fiduciary duties.
The Atlanta Journal-Constitution reported Wednesday that the lawsuit filed by the FDIC seeks $11.05 million in damages from officers of the bank that is one of more than 400 U.S. banks that have failed since the financial crisis began in January 2008.
Sawicki said his clients, "acted reasonably and in good faith." But the FDIC says the officers were recklessly aggressive with their investments.
The bank also mishandled loans, authorizing 21 loans with "inadequate, incomplete or outdated" documentation, "resulting in loans advanced to borrowers with no apparent ability to repay or otherwise service the loans," the FDIC said.
Including the bank officials in Georgia, the FDIC has authorized lawsuits against 427 individuals and is seeking $7.82 billion in damages, the newspaper said.