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Financial Services Law Insights and Observations

Bank settles with New York for $65 million over incentive compensation sales program

State Issues Incentive Compensation Securities Settlement State Attorney General

State Issues

On October 22, the New York Attorney General announced a $65 million settlement with a national bank to resolve allegations regarding its retail sales business model in violation of the Martin Act and New York common law. The Attorney General had alleged the bank failed to disclose to investors that the success of the bank’s incentive compensation program may encourage certain misconduct.

As previously covered by InfoBytes, in May, the bank announced it reached an agreement in principle to pay $480 million to investors to resolve a consolidated action related to the same issues.