Banking Law

Let me explain something to you. Um, I am not "Mr. Lebowski". You're Mr. Lebowski. I'm the Dude. So that's what you call me. You know, that or, uh, His Dudeness, or uh, Duder, or El Duderino if you're not into the whole brevity thing.
---Jeff Bridges as Jeffrey "The Dude" Lebowski in "The Big Lebowski"

Kevin LaCroix at The D&O Diary today discussed an interesting decision by a federal district court in Georgia that put a roadblock in the FDIC's inexorable drive for world domination of all things related to suing failed banks and the former shareholders, officers and directors of the same and of the holding companies that used to "hold" the banks' stock. In the past, when times were good and national banks were expanding their powers like mushroom caps multiplying in Hunter S. Thompson's cellar, we usually focused on the need for Lebensraum evinced by the OOC's preemption opinions and regulations. Now that Dodd-Frank has (purportedly) clipped the OCC's wings to a degree, and too-small-to-save community banks have been falling like wildebeests to the guns of Great White Hunters, the FDIC is gunning to become the one and only federal banking agency that everyone will have to refer to as "The Dude."

I wont rehash LaCroix's post or the judge's opinion. They're both short and you can read them quickly. It's good to know, however, that if shareholders who think they were defrauded when they bought holding company stock, sue the former controlling shareholders and directors of the holding company for fraud under federal and state securities laws, then just because the FDIC subsequently asserts that the fraud suit is actually a "disguised derivative action against the bank," that allegation won't magically "make it so." The judge correctly (in my view) found that the lawsuit was clearly what it purported to be and that the FDIC was dead wrong.

On the other hand, I have to admire the FDIC's lust for power and the ingenuity of the argument it made. In fact, I intend to use the FDIC's argument the next time I'm at a cocktail party and to allege that I'm actually Brad Pitt in disguise. Hey, I hear that Sheila Bair's been claiming she's actually Jessica Simpson in disguise and that she snagged John Mayer, so I might as well give it a shot.