SAN DIEGO -- SDNB Financial Corp., its San Diego National Bank subsidiary, and Charles Feurzeig, chairman of both companies, agreed to pay $1 million to settle lawsuits that claimed they aided and abetted a securities fraud.
Investors in Pioneer Mortgage Co. and related entities contended in suits filed in 1990 that San Diego National Bank and other institutions funded loans that helped the mortgage broker operate a pyramid scheme. Pioneer Mortgage is in bankruptcy proceedings in San Diego.
SDNB said that half the settlement would be paid by the bank holding company and half by Mr. Feurzeig.
The company said it settled to save legal costs. The plaintiffs said that "neither the bank nor its officers and directors intentionally did anything to cause the investors in Pioneer Mortgage to make, or lose, their investments."