MONEY

Ex-executives sue CertusBank, investor

David Dykes
ddykes@greenvillenews.com

Three former CertusBank executives have sued the bank, an investor and a firm managed or controlled by the investor, alleging the executives were unjustly fired and defamed as part of a conspiracy to spread false information amid allegations of financial mismanagement.

In a federal lawsuit filed late Wednesday, Milton Jones Jr., Walter Davis and Angela Webb allege they were given 15 minutes to decide whether to resign their bank positions or be fired and someone released confidential bank and financial information about CertusBank customers that was used in an effort to defame the executives and cause them to be terminated.

CertusBank, New York resident Benjamin Weinger and 3-Sigma Value Financial Opportunities, a Delaware limited partnership managed or controlled by Weinger, are named as defendants, according to court records.

A spokesperson for Greenville-based Certus had no comment Wednesday night. Weinger and his organization couldn't be reached.

Weinger is a 4.9 percent equity investor in CertusBank, according to court records.

The former executives allege in the lawsuit Weinger and 3-Sigma wanted to change the bank's management and board composition to position CertusBank as an acquisition target "because they did not receive a rapid return on their hedge fund investment."

"In order for Weinger's plan to be successful, the plaintiff's authority to manage had to be rescinded and their reputations and credibility had to be publicly destroyed," the lawsuit alleges.

CertusBank, formed by Jones, Davis and Webb in 2010, initially was capitalized by a commitment of $500 million in private equity through a small group of investors, the suit said.

The plaintiffs, who are African American, built CertusBank into the largest minority founded and operated financial institution in American history, according to the suit.

The $1.66 billion-asset bank said earlier this month that Jones, Davis and Webb were terminated from their respective posts as executive chairman, chief executive officer and president.

CertusBank has lost $84.1 million in the last two years, according to Federal Deposit Insurance Corp. records, and has been dealing with questions about a number of the privately held company's expenses.

On March 29, The Greenville News reported CertusBank was looking into issues raised in a story by trade publication American Banker that cited sources alleging "gross mismanagement by senior executives."

American Banker reported some investors questioned several expenses by CertusBank, whose corporate headquarters are in the One development in downtown Greenville.

In their suit, the former executives denied financial mismanagement. Expenditures on PGA tour events and for political events were made with the board's knowledge, according to the suit.

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