OTS Acting Director Facing Investigation

Senior Deputy Director and CEO of the Office of Thrift Supervision [OTS] Scott Polakoff, who was serving as Acting Director, is on leave pending an investigation into his agency’s role in allowing several banks to falsify financial statements, the OTS said in a statement.

The Secretary of the Treasury T. Geithner has appointed John E. Bowman, Deputy Director and Chief Counsel, as Acting Director of the OTS, effective immediately.

The sudden replacement of Scott Polakoff came as a result of findings by Treasury Dept. Inspector General Eric Thorson about “certain actions taken by management” at the OTS, according to a Treasury statement.

The Treasury’s inspector general is investigating a number of instances in which OTS employees allowed banks to exaggerate their financial situation in required filings by including money they did not receive until after the reporting period. The inspector general has already found that the senior OTS official  Darryl Dochow, allowed IndyMac Bancorp to overstate its financial health just weeks before the Pasadena, Calif.-based mortgage lender was seized by regulators. Thorson wrote in a letter to members of Congress that the OTS had also allowed other thrifts to record capital infusions in an earlier period than when they were received. [via WaPo]

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