More than two years after the collapse of Sonoma Valley Bank, its president and a loan officer have been banned from the banking industry by federal regulators who found that each man had engaged in "a pattern of misconduct" that damaged the now-defunct bank.
The Federal Deposit Insurance Corporation ordered the bans for Sean Cutting, the former bank's president and CEO, and loan officer Brian Melland. It imposed a $10,000 fine on Cutting and a $2,500 fine on Melland.
Both men were accused of "reckless, unsafe or unsound banking practices" by the FDIC, which released its decision Friday. In addition, Melland allegedly benefited financially from his actions, according to the order.
The FDIC orders didn't specify the violations and "breaches of fiduciary duty" the two men allegedly committed at the Sonoma bank, which was taken over by regulators in August 2010.
Shareholders and other critics have maintained that Sonoma Valley got into trouble when bank officials made more than $40 million in risky real estate loans to a Marin County developer and his associates.
Despite silence on the specifics, the two federal orders concluded the conduct by Cutting and Melland demonstrated an "unfitness to serve" in the banking industry.
A spokeswoman for the FDIC declined further comment on the orders.
A former bank shareholder and an attorney who represents investors suing the bank both expressed support for the federal action.
"It was sort of a pleasant surprise to us, to see that the FDIC said something and did something," said Newton Dal Poggetto, a Sonoma attorney and a shareholder involved in a lawsuit against the bank's top officials.
Melland declined comment and Cutting didn't return calls for comment. Cutting's attorney, Neal Stephens of Palo Alto, said his client had voluntarily agreed to accept the order but hadn't acknowledged any impropriety.
"Mr. Cutting has neither admitted nor denied any of the issues in the FDIC order," Stephens said Tuesday. He declined further comment.