Feb. 27--NORFOLK -- Edward J. Woodard Jr., the imprisoned former head of Bank of the Commonwealth, has settled a civil suit with the Securities and Exchange Commission without having to pay a penalty.
Woodard, 70, is serving 23 years in prison for crimes related to the collapse of the bank.
The key part of the settlement is that Woodard has agreed not to serve on the board of any company that trades securities. He also has agreed never to violate securities laws.
While not admitting any wrongdoing, Woodard has agreed not to publicly deny the allegations in the SEC complaint. A federal judge must approve the settlement, which was filed with the court Monday.
"He did not contest it," said Woodard's lawyer, Stanley Sacks. "In his judgment, he hadn't violated any securities law, but he didn't want to fight it."
Woodard, former president and CEO of Bank of the Commonwealth, was sentenced in November after a jury earlier in the year found him guilty of 11 counts of conspiracy, bank fraud and related charges. He is appealing.
He was convicted along with former bank Executive Vice President Stephen Fields, who was sentenced to 17 years in prison.
The SEC filed a separate civil action a year ago against Woodard, Fields and former bank Chief Financial Officer Cynthia Sabol, who has not been charged criminally but who acknowledged in court filings that she received a "target letter" from the FBI saying she might be charged.
Sabol has denied any wrongdoing in her court filings but has declined to comment publicly on the allegations. Fields has yet to respond to the SEC lawsuit.
Amid years of mounting losses, including writing off some $150 million in loan losses, Bank of the Commonwealth was shut down by state and federal regulators in September 2011.
Woodard, Fields and Sabol, the SEC suit says, ignored warnings from consultants and regulators about those problem loans, tried to hide the problems in public filings, and then lied to external auditors about them.
Richard Hong, an attorney for the SEC, declined to comment on the settlement.
The settlement says Woodard has no ability to pay a penalty and is already facing an order in the criminal case to repay the Federal Deposit Insurance Corp.$333 million, the amount it lost in taking over the bank and selling its assets to Mount Olive, N.C.-based Southern Bank.
The SEC said this is a typical settlement in a case where a defendant has no assets.
Sacks said that even if Woodard gets out of prison, he never had any intention of working for a bank or serving on a board.
As for prison life, Sacks said Woodard is dealing with health issues but is otherwise adapting.
"He's not complaining about the confinement, which is no picnic, but he really needs to be in a medical facility," Sacks said.
He said Woodard will ask the Bureau of Prisons for a transfer to an appropriate medical prison. He currently is in the low-security Fort Dix facility.
Woodard still faces one more legal obstacle. Former bank shareholders sued Woodard, Fields, Sabol, Woodard's son, Troy Brandon Woodard, who was also convicted in the criminal case, and several former bank board members. Shareholders lost everything when the bank collapsed and blame Woodard and the others for their losses, according to the lawsuit.
No trial date has been set.
Tim McGlone, 757-446-2343, firstname.lastname@example.org
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