Ex-TierOne Bank CEO guilty on 12 of 13 charges, could face decades in prison

[Omaha Steve]

Source: Omaha World Herald

By Russell Hubbard

LINCOLN -- The former chief executive of TierOne Bank was found guilty Friday morning on 12 of 13 charges in a criminal fraud trial related to the collapse of the firm. It was Nebraska's largest-ever bank failure.

Gil Lundstrom, 74, could face decades in prison after his convictions.

Lundstrom was indicted last year on charges related to the insolvency of Lincoln-based TierOne, which collapsed after lending millions to out-of-state homebuilding companies that were also trying to cash in on the housing bubble last decade.

Prosecutors say Lundstrom concealed delinquent and uncollectible loans from investors and regulators, making the bank look healthier than it was. At the end in 2010, when the bank was seized and shuttered by regulators, shareholders were left with worthless stock that had tanked from a high in 2006 of $35 a share. Loans not being paid as agreed ballooned to 22 percent of loans, many times the 3.2 percent that was the average for Nebraska banks at the time.

FULL story and related stories at link.

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KENT SIEVERS/THE WORLD-HERALD

Former TierOne Bank CEO Gil Lundstrom walks to U.S. District Court in Lincoln on Nov. 2, 2015.



Read more: http://www.omaha.com/money/ex-tierone-bank-ceo-guilty-on-of-charges-could-face/article_981b0f02-84a7-11e5-92ac-8331042119c8.html

[truedelphi]

1. Nebraska is the only state in the Union that has a decent set of money and banking laws.

The Senator from Nebraska, on Sen Dorgan, a "D", was the only one out of our one hundred Senators that voted against the Bank Modernization Act that destroyed the middle class' Glass Steagal protections.

We as a nation need to revise our financial laws to mirror those of Nebraska.

[hibbing]

3. Senator Dorgan from Nebraska?

There was no Senator Dorgan from Nebraska. I have a neighbor who worked for this bank, I hope stock options were not part of his compensation.

Peace

[truedelphi]

4. Oops make that North Dakota?

or South Dakota.

And I have only gotten that one wrong for like five years!

Sorry.

[hibbing]

5. no worries

[valerief]

2. Why didn't they get a bailout like the too-big-to-fail banks did and

the mortgagee victims didn't? Guess you gotta be in the PTB club.

[vinny9698]

6. When investors get ripped off; you go to jail, but consumers get ripped; off business of the year

That's the everyday occurrence.

[Lionel Mandrake]

7. Investors get ripped off every time executives are overpaid.

When the CEO of a public corporation is also chairman of the board of directors, despite the obvious conflict of interest, the board is likely to value his services more than an independent board would. Compensation of other executives then becomes excessive as well. This legal theft from shareholders is also business as usual.