Anchor BanCorp Wisconsin and its former chief financial officer have agreed to settle a federal fraud lawsuit accusing them of underreporting losses from bad loans, but they have not admitted misconduct.
The U.S. Securities and Exchange Commission filed the lawsuit Wednesday, just two days after Anchor BanCorp filed for bankruptcy reorganization. The lawsuit accuses the company and former CFO Dale Ringgenberg of "intentionally or recklessly" underreporting losses from bad loans in 2009.
External auditors found discrepancies in the company's earnings report for the quarter that ended June 30, 2009, and Ringgenberg did not immediately correct the figures, the Wisconsin State Journal reported.
The company announced a net loss of $11.8 million for that quarter, but the projected loss should have been $15.8 million, the lawsuit said. Ringgenberg also ignored $7.4 million that should have been included in a reserve account for loan losses, it said.
The SEC said Ringgenberg and the bank are settling the lawsuit without admitting or denying the allegations. A deal calls for Ringgenberg to pay a $75,000 penalty. He will also be barred from serving as an officer or director of a public company for five years.
The bank will not pay a penalty under the deal that still must be approved in federal court.
Ringgenberg, 65, worked for Anchor BanCorp for nearly 35 years. He was named CFO in July 2007. The $75,000 fine represents about half of his annual salary in 2009, the newspaper reported.
Ringgenberg retired in 2010 and was one of three Anchor BanCorp executives to leave after CEO Chris Bauer took over in June 2009 with a pledge to strengthen the business.
Mark Timmerman, the bank's executive vice president, said the settlement is not related to the bankruptcy filing. He noted the company disclosed the SEC investigation in its annual report filed in May.
"What the commission has alleged are very, very technical accounting violations," Timmerman said. "No current officer, director or employee is alleged to have participated or had any knowledge."