OTS Wants Former Chief Executive to Repay $8.2M Trading Loss

The Office of Thrift Supervision has charged the former chief executive of a New Orleans thrift with making unauthorized securities trades that cost it $8.2 million in losses.

The administrative charges against Paul D. Clayton were filed Nov. 1.

Mr. Clayton, who was also president of the thrift, Eureka Homestead Society, was accused of making repeated margin trades on its behalf and concealing them from its directors.

The OTS is seeking restitution and to ban him from banking.

The agency said Mr. Clayton's unauthorized trades began in 1987 and continued until October 1993, when they were discovered during a regular OTS examination.

In the years before the discovery, Eureka grew fast; assets climbed from $58.8 million in 1984 to $124 million in 1993.

Trading losses severely depleted Eureka's capital, but the thrift has since recovered.

Mr. Clayton, who had worked at Eureka since 1980, resigned at the request of his board after the losses were unveiled.

Before joining Eureka, he had been a bank examiner for the state of Louisiana.