SEC – Administrative Proceeding – Fifth Third Bancorp

Washington, DC (STL.News) The U.S. Securities and Exchange Commission has filed an Administrative Proceeding (File No. 3-15635) on December 29, 2021, against Fifth Third Bancorp and Daniel Poston, Respondents, Order Appointing Fund Administrator and Setting Administrator’s Bond Amount.

The Filing states:

On December 4, 2013, the Commission issued an Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Sections 4C and 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions and Cease-and-Desist Orders and Penalties (the “Order”)1 against Fifth Third Bancorp and Daniel Poston (collectively, the “Respondents”).  In the Order, the Commission found that Fifth Third failed to record substantial losses during the 2008 financial crisis by not properly accounting for a portion of its commercial real estate loan portfolio.  In the third quarter of 2008, Fifth Third decided to sell large pools of non-performing commercial loans.  U.S. accounting rules required the company to reclassify the loans from “held for investment” to “held for sale” and to carry them at fair value.   Because the fair value of these loans were significantly below Fifth Third’s carrying value, classifying them as held for sale would have resulted in a $169 million impairment and increased the company’s pretax loss in the third quarter of 2008 by 132%.   Instead, Fifth Third continued to classify the loans as “held for investment,” which incorrectly suggested that the company had not made the decision to sell the loans.

NOTE: This is not the complete filing.

CLICK to read the complete Filing – PDF