SEC Charges Former Bank Officials

The Securities and Exchange Commission has charged Edward J. Woodard, Cynthia A. Sabol, and Stephen G. Fields, former officers of the now defunct Bank of the Commonwealth. 
 

The complaint, filed today, January 9, in the U.S. Eastern District of Virginia, charges them with understating millions in losses.

It also charges them with hiding the “true health of the bank’s loan portfolio at the height of the financial crisis.”

The bank and its parent, Commonwealth Bankshares, were dissolved in 2010. Woodard is under indictment by the U.S. Justice Department.

The SEC alleges that Edward J. Woodard, Jr., who was the CEO, president and chairman, along with Chief Financial Officer and Secretary Cynthia A. Sabol, a CPA, and Executive Vice President and Commercial Loan Officer Stephen G. Fields understated the bank's loan-related losses as well as losses on real estate repossessed by the bank.

The SEC's complaint further alleges that Woodard knew of the true state of Commonwealth's loan portfolio, the SEC said.

He was involved in the activity to hide the deterioration of many of the loans at issue and was responsible for the misleading public statements and in particular those in earnings releases, the complaint said.

Sabol, as CFO, knew of the activity to mask the problems with the company's loan portfolio and the their implications, the SEC said.

Yet Sabol signed the disclosures and certified to the investing public that they were accurate, the complaint said.

Fields oversaw the bank's largest portfolio of construction and development loans and was involved in the masking practices, the SEC complaint said.