The Bank fails and is taken over by the FDIC. Two separate lawsuits are brought against the Bank. In the first suit, an investor of the Bank, who is not an Insured Person under the Policy, sues the Bank’s directors and executive officers for mismanagement and negligence. The Bank could not indemnify the directors and officers due to financial insolvency. In the second suit, the FDIC names the directors and officers of the Bank, alleging gross negligence, breach of fiduciary duty, and usurping corporate opportunity in the operation of the Bank. The FDIC claims the Bank was damaged as a result of the alleged wrongdoing of the directors and officers and seeks significant damages against them.

Shareholders, none of whom are Insured Persons under the Policy, sue the Bank’s directors for violations of federal and state securities laws controlling the sale of securities to the public in connection with the Bank’s initial public offering. The shareholders allege that the Bank’s directors failed to timely amend and disclose financial statements, failed to timely amend and disclose the prospectus; marketed and sold shares of the Bank which were not properly authorized under the Bank’s Articles of Incorporation; and made misstatements designed to create a false impression about the viability of the Bank.

The senior loan officer of the Bank is negotiating with XYZ Manufacturing to modify the terms of XYZ’s loans, which are currently past due. The loan officer knows that another Bank customer, DEF Conglomerate, is currently seeking acquisition candidates in the manufacturing industry. The senior loan officer brings the two parties together, hoping that DEF’s acquisition of XYZ will allow XYZ to become current on outstanding loans. The loan officer puts a positive spin on the financial health of XYZ even though she is aware of XYZ’s current financial difficulties. DEF Conglomerate acquires XYZ; four months later, after DEF learns of the extent of XYZ’s delinquent debt, they bring suit against the Bank’s senior loan officer for negligent misrepresentation and fraud.

A Bank loan officer saves customer information on a flash drive so that he can review loan applications at home. One evening, he discovers that the zip drive is missing from his briefcase. He informs the Bank of the possible breach of confidential customer information and the Bank sends notifications to the affected customers. Some of the customers suffer financial harm due to the information breach. These customers bring suit against the Bank and the loan officer for their negligent handling of sensitive information.

Prior to 2008, the Bank had continually provided loans to B Corporation for its operating expenses. B Corporation alleges that in the summer of 2008, the Bank orally agreed to loan B Corporation $151,000 to cover B Corporation’s operating expenses. According to B Corporation, the Bank thereafter informed them that it would not complete the loan. As a result, B Corporation is insolvent and brings a suit against the Bank, alleging breach of an agreement to make the loan, breach of contract, breach of a fiduciary relationship, negligence and duress.

The Bank’s customer is past due on its loan and, within the loan agreement, there is an explicit ‘no notice’ provision with regard to foreclosure. A representative of the Bank appears without notice on the borrower’s property, closes the business, and sends the employees home. The borrower brings suit against the Bank, stating that in the past, the Bank had permitted the borrower to make late payments, had attempted to work out a plan to ensure payment, and had led the borrower to believe that no default existed.

The Bank’s vice president orally agrees to extend credit to a customer to finance the customer’s purchase of a piece of commercial real estate. The customer had received a loan from the Bank for a similar project in the past using the same method of an oral commitment followed by completion of the necessary paperwork. Consequently, the customer moves forward with the purchase, only to be told by the Bank’s VP that the Bank cannot follow through on the loan. The customer brings suit against the Bank for the damages it suffers as a result of the Bank’s failure to provide the agreed upon financing.

The Bank loans a borrower a fixed sum of money to build a home. The construction on the home is not completed but the loan amount was fully disbursed. The borrower brings claims against the Bank alleging numerous wrongdoings, including advancing the loan proceeds before determining the progress of the construction, failing to notify the borrower of the advancements, and failing to ensure advancement consistent with the state of completion.

The Bank has made some payment-option ARM loans in the past. The city where the Bank is located brings a class action suit against the bank, seeking damages on behalf of the city’s residents who took out option ARMs from the Bank. The suit alleges predatory lending and deceptive business practices.

The Bank makes a loan to a local developer for a condominium project. The developer hires a construction company, who executes the Bank’s Contractor’s Consent and Certification Agreement. The developer hires the construction company superintendent on the condominium project, then seeks to fire the construction company from the project. The developer succeeds in obtaining approval from the Bank to terminate his contract with the original construction company and name a new construction manager. The original construction company files suit against the developer and the Bank. 

The Bank is given instructions by their customer, XYZ Communications, to wire transfer $118,000 to the Federal Communications Commission. The sum is required by the FCC as upfront payment to participate in an upcoming auction for radio wave licensing. The Bank fails to make the wire transfer in a timely manner, XYZ Communications misses the FCC’s payment deadline, and as a result, Smith loses the opportunity to bid in the auction. Smith brings suit against the Bank for their error, alleging the loss of hundreds of thousands of dollars of potential revenues that cannot be realized.

The Bank owns a subsidiary that provides mortgage broker services, placing loans with a variety of different lenders. One of the mortgage broker employees is requested to lock in a certain interest rate on behalf of a customer for a large commercial building. The mortgage broker fails to act in a timely manner and in the interim, interest rates rise. The customer is forced to accept the higher interest rate, resulting in additional costs. The customer sues the mortgage broker to recover damages.

The Bank has a subsidiary that provides title abstractor services. The Bank, as the first lien holder, began foreclosure on its lien. The Bank used its title abstractor subsidiary to perform a title search. The Title Abstractor missed the second lien holder (second mortgage) and the property was sold in foreclosure for much less than appraisal value. The second lien holder made a claim against the title abstractor and the Bank for lack of notice. The purchaser of the property made a claim for encumbered title.

The manager of the Bank’s in-house insurance agency spends a lot of time golfing with clients and little time overseeing the agency staff. His staff has seen strong growth in business with no new personnel hires, and consequently become extremely overworked. Careless mistakes are made, including neglecting to press the final ‘submit’ key on a few accounts that the agency has authority to bind. Without pressing the final ‘submit’ button during the online binding process, the Insurer is not aware the quote has been bound. A local small business location burns to the ground and the claim is denied because its ‘Insurer’ has no documentation of a policy in place. The small business sues the Bank’s insurance agency for its error in failing to follow through with placing the insurance policy.

A Bank customer purchases auto and homeowners insurance through the Bank, relying on her Bank insurance agent to give her advice regarding the coverages and limits she should buy. A few months after purchasing insurance policies through the Bank, the customer is at fault in a car accident where another driver is critically injured. The family of the injured driver sues the customer to recover medical expenses and other damages; the customer submits the claim to her insurer. Unfortunately, she discovers that she is underinsured and the Bank had never spoken with her about purchasing a personal Umbrella policy. The customer sues the Bank for its failure to determine appropriate coverages and coverage limits.

A customer of the Bank, tells the bank’s registered broker/dealer to invest $250,000 in LMN Corporation. However, the broker/dealer neglects to take careful notes during his meeting with the customer and, subsequent to the meeting, is called away from his desk for the remainder of the day. The next day, he sees his notes from the previous days’ meeting with the customer and mistakenly believes that he requested a $25,000 investment in LMN Corporation instead of $250,000. The customer sues the Bank for its failure to execute his trade instruction.

ABC Company establishes a 401(k) Profit Sharing Plan for its employees and chooses Bank & Trust as trustee of the Plan. ABC Company later discovers that Bank & Trust failed to file Form 5500 and tax returns for the Plan. ABC Company hires an accountant to review Bank & Trust’s handling of the Plan. The accountant details Bank & Trust’s failure to provide requested Plan documents, unorganized files and documentation, irregularities with accountings, and failure to file required forms and tax returns. ABC Company subsequently files suit against Bank & Trust for their negligence in handling the 401(k).

The Bank manages a trust for a family. The trust officer creates an investment strategy for the funds in the trust, but the trust officer neglects to fully explain the tax consequences of the investment strategy to the family. The family brings suit against the Bank and the trust officer for damages suffered due to the failure to adequately disclose the tax consequences.