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Abstract: 

In the aftermath of the “Great Recession” of 2008, the Federal Deposit Insurance Corporation (FDIC) has aggressively investigated and pursued claims against former directors and officers of failed banks as well as other institution-affiliated parties. The ability of directors and officers to defend themselves—and in particular to head off litigation before it even begins—is compromised by the FDIC’s refusal to give them pre-litigation access to bank documents. The FDIC prohibits directors and officers of troubled banks from keeping copies of bank documents in anticipation of litigation or enforcement action against them, and has made it clear that the agency has exclusive ownership and access to the failed bank’s financial and supervisory records. Indeed, the FDIC has threatened—and in some cases pursued—enforcement actions against those who violate its guidelines. Lacking the key documents needed to mount a defense at both the investigative stage, and in the early stages of litigation, former directors and officers are at a pronounced disadvantage. This article discusses the evolution of the FDIC’s hard-line approach, and then suggests strategies to mitigate the information disadvantage.

Keywords: directors, officers, access, bank documents, pre-litigation, D&O, FDIC, receiver

Affiliations:  1: Williams & Connolly LLP; 2: Williams & Connolly LLP.