Federal bank regulators have sued two brothers of former state Treasurer Alexi Giannoulias in connection with the failure of the family's Broadway Bank in 2010.Hat-tip Newsalert!
Also a defendant in the $104 million lawsuit, filed today in U.S. District Court in Chicago, is well-known Chicago real estate developer Sean Conlon, who served on Broadway's board.
In the complaint, the Federal Deposit Insurance Corp. alleges that Demetris Giannoulias, who was Broadway's president and CEO beginning in 2006, and George Giannoulias, who was chairman of the board, along with other board members ignored regulatory warnings and approved “grossly imprudent” commercial real estate loans that resulted in millions in losses, which ultimately were borne by the FDIC when the bank failed.
The suit doesn't name Alexi Giannoulias as a defendant. Alexi Giannoulias was an officer at Broadway before getting elected Illinois treasurer in 2006.
The litigation long had been anticipated given the spectacular collapse of a bank that for years was the most profitable in the state and was a major political issue during Mr. Giannoulias' run for the Senate seat formerly held by President Barack Obama in 2010.
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