If you purchased or acquired Fifth Third Bancorp common stock, Series G preferred American Depository Shares (ADS), and/or Series F preferred stock (“Eligible Securities”) during the period from October 21, 2008, through January 22, 2009, inclusive (“Relevant Period”), you may be entitled to a recovery from the Fair Fund.
On December 4, 2013, the Commission issued the Order1 instituting and simultaneously settling an accounting fraud action against the Respondents. In the Order, the Commission made the following findings. It found that Fifth Third failed to record substantial losses during the 2008 financial crisis by not properly accounting for a portion of its commercial real estate loan portfolio. In the third quarter of 2008, Fifth Third decided to sell large pools of non-performing commercial loans. U.S. accounting rules required the company to reclassify the loans from “held for investment” to “held for sale” and to carry them at fair value. Because the fair value of these loans were significantly below Fifth Third’s carrying value, classifying them as held for sale would have resulted in a $169 million impairment and increased the company’s pretax loss in the third quarter of 2008 by 132 percent. Instead, Fifth Third continued to classify the loans as “held for investment,” which incorrectly suggested that the company had not made the decision to sell the loans. In addition, according to the Order, Poston was familiar with the company’s loan sale efforts and understood the relevant accounting rules. Nevertheless, he failed to direct that Fifth Third classify the loans as required. Poston also made representations in a management letter to Fifth Third’s auditors that, in light of the company’s loan sale activities, were not true. Fifth Third’s and Poston’s accounting violations operated to deceive investors during a time of significant upheaval and financial distress for the company. The Commission ordered the Respondents to pay $6,600,000 in civil money penalties to the Commission.
On July 28, 2021, the Commission issued an order2 that created the Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid can be distributed to harmed investors. The Respondents have paid in full.
The Commission appointed Miller Kaplan Arase LLP as the tax administrator (the “Tax Administrator”) for the Fair Fund on September 23, 2021. The Commission appointed Guidehouse, Inc., Baker & Hostetler LLP, and PACE Claim Services LLC (“GBP”), as the fund administrator (“Fund Administrator”) for the Fair Fund on December 29, 2021.
If you wish to participate in the Fair Fund, under the terms of the Plan you must submit a Proof of Claim Form and the necessary documentation no later than 11:59 PM Eastern Time on June 5, 2023, to be eligible to recover from the Fair Fund (Guidelines For Filing A Proof Of Claim).
Once all the Eligible Claimants have been determined, the Fund Administrator will calculate each Eligible Claimant’s Recognized Loss in accordance with the Plan of Allocation and will distribute funds to the Eligible Claimants on a pro rata basis.
Copies of the administrative order and the approved distribution plan relating to this fair fund are located in the Resources page. Additional information can be found on the Frequently Asked Questions (FAQs) page.