Monday, February 7, 2005

Riggs National Bank Acquisition by PNC Financial Scuttled

As discussed in earlier posts (here and here), the acquisition of Riggs National Bank by PNC Financial was delayed by the federal investigation of possible money laundering violations by Riggs, including the bank's failure to monitor transactions by former Chilean dictator Augusto Pinochet. Riggs ultimately settled the criminal case by agreeing to plead guilty to a violation of the Bank Secrecy Act and pay a $16 million fine. The fallout from that case, and "continued deterioration" in Riggs' operations, led PNC to seek to modify the terms of the transaction, and Riggs has struck back by withdrawing from the deal and suing PNC in DC Superior Court.  An article in the Wall Street Journal (Feb. 7) discusses the collapse of the deal, which will likely result in Riggs drifting even further unless another can be located that might be interested in acquiring the bank.  Unfortunately for Riggs (and its shareholders), the prospect of a fire sale looms. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/02/riggs_acquisiti.html

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