Magazine article American Banker

FDIC Is Losing a Crusader as Feinstein Goes Private

Magazine article American Banker

FDIC Is Losing a Crusader as Feinstein Goes Private

Article excerpt

FDIC Is Losing a Crusader As Feinstein Goes Private

WASHINGTON -- The Federal Deposit Insurance Corp. had itself a crusader in lawyer Howard Feinstein, who is about to leave the agency to take a job in the Washington office of Thacher Proffitt & Wood.

In the mid-1970s, while with the Justice Department, Mr. Feinstein prosecuted Ku Klux Klan members in the South. In the face of death threats, he spent long nights sleeping on floors with his room blacked out.

Last year, with the FDIC, he spearheaded the investigation into Michael Milken and the Drexel Burnham Lambert Group's involvement in selling junk bonds to savings and loans.

A Belief in Deterrence

"I feel very uncomfortable with the thought of people in a federally regulated industry breaking the law and not paying a price for it," he said. "I believe in deterrence."

But after two years at the FDIC, where he was assistant general counsel and chief of the conflicts and criminal restitution section, the 44-year-old Mr. Feinstein said he was presented an "opportunity he couldn't refuse" to join Thacher Proffitt & Wood.

Mr. Feinstein ends his FDIC stint on a high note. His unit recently snared $12.5 million in restitution from Janet McKinzie, the former companion of the head of failed North American Savings and Loan Association in Costa Mesa, Calif. Ms. McKinzie was was slapped last year with a 20-year prison sentence for racketeering and bank fraud. "We just got the check," said Mr. Feinstein.

Mr. Feinstein's unit has six lawyers who work to recover assets stashed away by bank and S&L crooks, and to gather evidence to justify FDIC recommendations for stiff jail sentences. …

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