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SEC Takes Action Against Former United Commercial Bank Executives

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SEC FAILED CALIFORNIA BANK
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Securities regulators on Tuesday charged three former executives of United Commercial Bank with misleading investors about loan losses before the bank collapsed at the height of the financial crisis.

The U.S. attorney's office in California's Northern District unveiled parallel criminal charges against former bank executives, the Securities and Exchange Commission said in its announcement.

The SEC did not specify which executives were facing criminal charges.

The SEC's civil case involving the San Francisco-based bank alleges that its former Chief Executive Thomas Wu, Chief Operating Officer Ebrahim Shabudin, and Senior Officer Thomas Yu concealed losses on loans from the bank's auditors. That led the bank to understate its 2008 operating losses by about $65 million, the SEC said.

Shortly thereafter, the bank was seized by regulators, becoming one of the 10 largest bank failures during the financial crisis.

Its failure created a $2.5 billion loss to the Federal Deposit Insurance Corp's fund that backs customer deposits.

In addition to the SEC's civil case and criminal charges, the SEC said that the FDIC was taking enforcement action against 13 people for violations of federal banking regulations.

(Reporting by Sarah N. Lynch, editing by Maureen Bavdek)

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