Fraud Scandals at U.S. Banks Wipe $100 Billion, Spur Global Selloff as ‘Cockroach’ Credit Fears Mount
This week’s drama began when Zions Bancorporation, a Utah-based regional bank, revealed a major loan fraud that blindsided investors. In an SEC filing on Oct. 15, Zions said it discovered “misrepresentations and contractual defaults” in two large commercial loans made by its California Bank & Trust unitts2.tech. The borrowers – investment funds tied to financiers Andrew Stupin and Gerald Marcil – allegedly used the money to buy distressed mortgages, then shuffled the collateral to other entities, according to Zions’ lawsuitstraitstimes.comstraitstimes.com. Zions moved quickly: it accelerated the loans to default, sued the guarantors, and charged off $50 million, essentially writing the loans down to zero while it pursues recoveryts2.tech.