The Securities and Exchange Commission has settled charges against a former executive of UCBH Holdings, the parent of the failed United Commercial Bank in San Francisco.
Ebrahim Shabudin agreed to pay a $175,000 fine and to refrain from violating certain provisions of the Securities Act of 1934. He was also barred from serving as an officer or director of a public company, the SEC said Thursday.
In 2011, the SEC accused Shabudin, along with Thomas Wu, UCBH's former chief executive, and Thomas Yu, its senior officer, of lying to the company's investors and auditors about the severity of the losses during the financial crisis. Those false statements, along with improper delays in recognizing losses, helped UCBH understate its 2008 losses by $65 million, the SEC said.
Under the settlement, Shabudin neither admitted nor denied the allegations. The U.S. District Court for the Eighth District of California approved the settlement on Aug. 8, the SEC said.
The SEC also charged Craig On, UCBH's chief financial officer, with negligence in misleading the company's auditors. He settled those charges for $150,000 in 2011.
United Commercial Bank was seized and sold to East West Bancorp (EWBC) in November 2009, two months after Shabudin and Wu resigned as details of their efforts to cover the company's losses emerged. United Commercial, which catered to Chinese-Americans, had roughly $13 billion in assets at the time of its failure, which cost the FDIC about $2.5 billion.
Shabudin's fine will be partly reduced by a penalty that he paid the FDIC in an similar administrative action, the SEC said.