The Office of the Comptroller of the Currency issued a cease-and-desist order to restrict further insider dealings with any financial institution by Vernon W. Hill 2nd, the former chairman and chief executive of the $49 billion-asset Commerce Bancorp Inc. of Cherry Hill, N.J.
The OCC order requires Mr. Hill to pay $4 million to Toronto-Dominion Bank, which bought Commerce Bancorp and its bank in March.
Mr. Hill resigned from Commerce in July of last year, immediately before the OCC put a similar order on Commerce Bank to sever relationships with parties affiliated with Mr. Hill, including InterArch Inc., an architecture design company owned by Mr. Hill's wife, and Interstate Commercial Real Estate Inc., a real estate firm where his brother and son are executive officers.
The OCC could not adjudicate the matter without additional costs, so it opted to put restrictions on Mr. Hill's future real estate transactions with financial institutions. He must report all future transactions in that area to the board and the audit committee of any involved insured depository institution.
In cases where Mr. Hill is an officer, director, or major shareholder at an institution involved in such a transaction, he also must obtain an opinion from an independent accounting or other firm with appropriate expertise that the transaction is fair.
In an interview Monday, he said the order vindicated him of any wrongdoing at Commerce. "After a two-year witch hunt, the OCC found that neither Commerce Bank nor I violated any regulation or law."
In June, the $965 million-asset Republic Bancorp Inc. of Philadelphia announced that Mr. Hill was the lead investor in a group that had pumped $10.8 million of capital into the company. Last week the $2.1 billion-asset Pennsylvania Commerce Bancorp Inc. of Harrisburg, which Mr. Hill helped found in 1986, announced that it was buying Republic for about $110 million in stock. Mr. Hill would be Pennsylvania Commerce's largest individual shareholder after the purchase.
Pennsylvania Commerce has also been operating under a consent order with the OCC. Commerce Bancorp owned a 10% stake in it before the sale to TD.
He still has a lawsuit pending against Toronto-Dominion Bank for $50 million of damages, mainly related to payments and perks he says were in his employment agreement but were not honored.
Officials from Toronto-Dominion, Republic, and Pennsylvania Commerce did not return calls for comment.
