Anchor Settles SEC Complaint over Financial Report

Anchor BanCorp Wisconsin (ACBW) has settled fraud charges brought by the Securities and Exchange Commission in connection with one of its 2009 quarterly reports.

The SEC filed a complaint against the $2.3 billion-asset company on Wednesday, alleging that its former chief financial officer manipulated the figures in its 10-Q for the second quarter of 2009, Anchor said in a regulatory filing. Anchor settled the complaint without admitting or denying the allegations and without paying a fine, it said.

As part of the settlement, Anchor agreed to heed provisions of the Securities Act of 1934 dealing with internal controls and recordkeeping, and to comply with anti-fraud rules in the act.

The SEC's complaint alleges that Dale Ringgenberg, Anchor's former chief financial officer, failed to account for an error that Anchor's auditor discovered in how the company classified certain bad loans; the error increased the company's loan-loss reserve by $4 million.

In order to offset the error, Ringgenberg reduced a separate estimate of loan losses by $4 million, the complaint says. Anchor's 10-Q from the second quarter of 2009 showed a $15 million quarterly loss, and a $19.4 million provision for loan losses.

Ringgenberg agreed to pay a $75,000 fine and not to serve as an officer or director of a public company for five years.

Ringgenberg, 65, retired in 2010, said Mark Timmerman, Anchor's corporate counsel. Ringgenberg had been with Anchor since 1976 and was treasurer and CFO from 2007 through his retirement.

"The company is pleased with the settlement of these matters, which took place some four years ago," said Timmerman, who added that no current Anchor employee has been accused of being complicit in Ringgenberg's misstatements.

The Madison, Wis.-based Anchor filed for a Chapter 11 restructuring this week that would allow it to repay a large credit line at a discount and convert its outstanding Troubled Asset Relief Program balance into common stock. Anchor resorted to Chapter 11 after one of its creditors, Associated Banc-Corp (ASBC), rejected the extension of a $183 million line of credit, court documents show. Associated denied that it was responsible for Anchor's bankruptcy filing.

The timing of the settlement is unrelated to the bankruptcy filing, Timmerman said. The company had received a Wells notice  in February informing it that the agency recommended bringing civil charges over the misstatements; under the law, the SEC has six months after sending a Wells notice to file charges.