Raider Charged With Hostile Bid for Mutual Savings Bank

ELMWOOD PARK, N.J. – A well-known financier who initiated the first raid of converted credit union, was charged in a civil suit last week with illegally trying to take over a mutual savings bank. Spencer Savings Bank charged in federal court that Lawrence Seidman is violating the Savings and Loan Holding Company, which prohibits outsiders from gaining control of a mutual savings bank. The action, filed in U.S. District Court for Northern New Jersey, claims Seidman has been soliciting other depositors in the mutual savings bank in a campaign for Spencer Savings board seats. The suit claims Seidman and a ‘wolf-pack’ of accomplices have tried to turn depositor/owners against the bank’s management in order to gain representation on the board, convert the bank to a stock company, then sell it to make a quick profit. Seidman is an active speculator in savings banks, engaging in several proxy contests for board seats and often agitates for the sale of the institution. It was Seidman’s acquisition of a large stake in Jade Financial Corp. upon its 1999 initial public offering–the first converted credit union to go public–that prompted a takeover of the institution, formerly known as IGA FCU. Seidman is also currently engaged in a proxy fight to gain three seats on the board and force the sale of Center Bancorp, in Union, N.J.