Magazine article American Banker

Bank of Boston-RIHT Merger Not in the Clear Yet: Rhode Island Regulators Rethink Approval; Dissident Shareholder Takes Suit to Higher Court

Magazine article American Banker

Bank of Boston-RIHT Merger Not in the Clear Yet: Rhode Island Regulators Rethink Approval; Dissident Shareholder Takes Suit to Higher Court

Article excerpt

PROVIDENCE, R.I. -- The Bank of Boston Corp.'s merger with the RIHT Corp. here still faces at least two more hurdles in Rhode Island.

The U.S Supreme Court's approval of the New England regional compact gave the merger the green light. But the state's Board of Bank Incorporation, at the request of Attorney General Arlene Violet, an ex-officio member of the board, is reconsidering its earlier approval of the merger and wants more specific answers about how the Boston bank will change its currency transaction procedures.

The Bank of Boston's chief subsidiary, the First National Bank of Boston, pleaded guilty in February to a felony violation of failing to report $1.2 billion in currency transactions with foreign banks. The bank was fined $500,000.

Also, a dissident shareholder is appealing in state superior court here a lawsuit charging RIHT, parent of Hospital Trust Bank, with mismanaging the company and damaging the stockholders' interest. The original suit was dismissed.

Ms. Violet is also not satisfied with the Bank of Boston officials' explanation of why, during a hearing on the bank merger last summer, they did not tell the state bank board about their appearance before a federal grand jury investigating a reputed Boston crime family. Bank records had been subpoenaed.

The Bank of boston later admitted that it had improperly put two real estate firms controlled by the family of Gennaro J. Angiulo, Boston's reputed organized crime chief, on a list of companies exempt from having their large cash transactions reported to the government. …

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