12 U.S.C. § 5393 — Ban on certain activities by senior executives and directors

(a) Prohibition authority. The Board of Governors may use the authority in this section. If the covered financial company^* was not supervised by the Board of Governors, the Corporation may use that authority instead.

(b) Authority to issue order. The appropriate agency described in subsection (a) may take an action authorized by subsection (c) if it determines all of the following:

(1) Before the Corporation was appointed receiver, a senior executive or director^* of the covered financial company^* directly or indirectly:

(A) Violated any of the following:

(i) A law or regulation;

(ii) A cease-and-desist order that had become final;

(iii) Any condition that a Federal agency imposed in writing in connection with any action on an application, notice, or request by the company^* or senior executive; or

(iv) Any written agreement between the company and that agency;

(B) Engaged in or took part in an unsafe or unsound practice involving any financial company; or

(C) Committed or engaged in an act, omission, or practice that breached the fiduciary duty of the senior executive or director.

(2) Because of the violation, practice, or breach described in any subparagraph of paragraph (1), the senior executive or director received a financial gain or other benefit because of that violation, practice, or breach, and the violation, practice, or breach contributed to the company’s failure; and

(3) The violation, practice, or breach either:

(A) Involved personal dishonesty by the senior executive or director; or

(B) Showed that the senior executive or director willfully or continually disregarded the safety or soundness of the company.

(c) Authorized actions.

(1) In general. The appropriate agency for a financial company, as described in subsection (a), may serve a senior executive or director described in subsection (b) with a written notice stating that the agency intends to prohibit that person^* from taking any further part, in any manner, in conducting the affairs of any financial company. The agency decides the length of the prohibition based on the violation, practice, or breach. The prohibition must last at least 2 years.

(2) Procedures. The due-process requirements and other procedures under section 8(e) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)) apply to actions under this section as if the covered financial company were an insured depository institution and the senior executive or director were an institution-affiliated party, as those terms are defined in that Act (12 U.S.C. 1811 et seq.).

(d) Regulations. The Corporation and the Board of Governors, in consultation with the Council, must jointly prescribe rules or regulations to administer and carry out this section. These rules or regulations may include rules, regulations, or guidelines that further define the term “senior executive” for this section. This section does not itself define “senior executive,” “appropriate agency,” “covered financial company,” “unsafe or unsound practice,” “personal dishonesty,” or “willful or continuing disregard.”