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Popular Gets Legal Relief

Judge dismisses lawsuit by investor Stoneridge Investment Partners


December 25, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

A deferred prosecution agreement signed Jan. 16, 2003 between Popular Inc. and the U.S. Treasury Department’s Financial Crimes Enforcement Network (Fincen), the U.S. Justice Department, and the Board of Governors of the Federal Reserve System will be fulfilled a year to the day unless Fincen provides a 30-day extension to revise the decision, the bank announced in a statement.

The agreement came about after a federal investigation uncovered that between 1995 and 2000, Banco Popular de Puerto Rico failed to report suspicious financial activities. The institution also received a $21.6 million fine, the largest penalty imposed by the U.S. Justice Department on any bank for such failure.

Popular notched a victory, however, when federal Judge Carmen Consuelo Vargas de Cerezo on Dec. 16 dismissed a lawsuit by Popular stockholder Stoneridge Investment Partners LLC, which alleged that Popular’s board members had been negligent in their fiduciary responsibilities and contributed to the reporting infraction. In her decision, the judge cited the General Corporations Law of 1995, which prohibits stockholders from claiming damages for events that occurred before they became stockholders. Records show Stoneridge Investment Partners wasn’t a Popular stockholder before August 2001.

"We are extremely pleased with the ruling, which validates our point of view and brings this chapter to an end," said Brunilda Santos de Alvarez, Popular’s executive vice president and legal counsel.

This Caribbean Business article appears courtesy of Casiano Communications.
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