A Chicago entrepreneur is suing the Federal Deposit Insurance Corp. to win back capital he invested in a bank in the months before it failed.

Pethinaidu Veluchamy, the chief executive of a direct marketing conglomerate, filed a complaint last week against the FDIC in federal court in Chicago, claiming that the regulator acted in a way that was "arbitrary, capricious [and] an abuse of discretion" in declining to approve a capital restructuring that would have benefited Mutual Bank in Harvey, Ill., before it was taken over last July.

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