On August 16, 2022, the Commission issued a Corrected Order Instituting Cease-and-Desist Proceedings, and Imposing a Cease-and-Desist Order (the “Order”) against the Respondent. In the Order, the Commission found that Eagle made material misstatements and omissions about related party loans that Eagle’s principal subsidiary, EagleBank, extended to family trusts affiliated with Eagle’s former Chairman, CEO, and President, Ronald D. Paul, and to other related parties. From March 2015 through April 2018, Eagle failed to include these undisclosed loans in the related party loan balances included in its annual reports and proxy statements filed with the Commission. Eagle and Paul also made false statements regarding the nature of the loans in two press releases.

Based on this conduct, the Commission found that Eagle violated the Securities Act of 1933, and the Securities Exchange Act of 1934. Investors who purchased or acquired the Security between March 2, 2015, and July 17, 2019, inclusive, suffered losses as a result of Eagle’s non-disclosure of related-party loans, which caused artificial inflation in the price of the Security and price drops surrounding corrective disclosures.

The Commission ordered Eagle to pay 2,600,000 in disgorgement, $750,493 in prejudgment interest, and a $10,000,000 civil money penalty, for a total of $13,350,493.00. The Commission further ordered that the Fair Fund may be combined with any fund established for the benefit of harmed investors in SEC v. Ronald D Paul, 1:22-cv-06985 (S.D.N.Y) (“the “Related Action”). The Fair Fund consists of $13,350,493 million collected from the Respondent in this matter and the $431,216.00 collected in the Related Action which is currently on deposit in an interest-bearing account at the United States Treasury’s Bureau of Fiscal Service. Any additional funds received pursuant to the Final Judgment will be added to the Fair Fund.

On May 17, 2023, the Commission appointed Heffler, Radetich & Saitta, LLP as the tax administrator (the “Tax Administrator”) and authorized the SEC to pay all tax obligations and administrative fees and expenses of the Tax Administrator without further Court Order. The Court also appointed JND Legal Administration as the Distribution Agent (“JND” or “Distribution Agent”) for the Fair Fund to assist in overseeing the administration of the Fair Fund in coordination with SEC staff, pursuant to the terms of a Distribution Plan to be approved by the Court.

The Plan sets forth the methodology and procedures for distributing the Net Available Fair Fund. The allocation methodology is substantially similar to the court-approved methodology developed for the Class Action. The Fund Administrator and Commission staff have concluded that distributing funds pursuant to the Plan, including but not limited to its Eligible Loss Amount calculation and pro-rata distribution formula, is a fair and reasonable way to compensate investors injured as a result of the Respondents’ conduct.

The Eligible Security is set forth below. Additional information can also be found in Exhibit A of the Distribution Plan, accessible on the Important Documents tab of this website.

The Fund Administrator shall oversee the administration of the claims, procedures, and distribution as provided in this Plan. The Fund Administrator shall review all submitted claims and supporting documentation and make determinations under the criteria established herein as to the eligibility of Claimants to recover monies and the amount of money to be distributed from the Net Available Fair Fund to Eligible Claimants.

If you previously filed a claim for Eagle Bancorp Inc., you will automatically be included in this Fair Fund and there is no need to submit an additional claim form unless you need to amend the transactions.

If you invested the Eligible Security during the Relevant Period (identified above: “What is the Security and the Relevant Period”; are not an “Excluded Party” as defined in the Distribution Plan and below: “Who is an ‘Excluded Party’ as Defined in the Distribution Plan”; and suffered a loss according to the Plan, you may be eligible for a distribution from the Eagle Bancorp Fair Fund.

“Excluded Party” shall mean:

1. The Respondent;
2. Present or former officers or directors of Respondent or any assigns, creditors, heirs, distributees, spouses, parents, dependent children or controlled entities of any of the foregoing Persons or entities;
3. Any employee or former employee of the Respondent or any of its affiliates who has been terminated for cause or has otherwise resigned in connection with the conduct described in the Order;
4. Any Person who, as of the Claims Bar Date, has been the subject of criminal charges related to the conduct described in the Order or any related Commission action;
5. Any firm, trust, corporation, officer, or other entity in which Respondent has or had a controlling interest;
6. The Fund Administrator, its employees, and those Persons assisting the Fund Administrator in its role as the Fund Administrator; or
7. Any purchaser or assignee of another Person’s right to obtain a recovery from the Fair Fund for value; provided, however, that this provision shall not be construed to exclude those Persons who obtained such a right by gift, inheritance or devise.

The Fund Administrator shall distribute the Net Available Fair Fund to all Eligible Claimants only after all timely submitted Proof of Claim Forms have been processed and all Claimants whose claims have been rejected or disallowed, in whole or in part, have been notified and provided the opportunity to cure pursuant to the procedures set forth in the Distribution Plan. The Claimants Recognized Loss will be calculated according to the Commissions approved Plan of Allocation. Should the sum of the Recognized Losses of all Eligible Claimants (minus any Prior Recovery) exceed the Net Available Fair Fund, the Fund Administrator will distribute funds to the Eligible Claimants based upon a pro rata distribution formula. The Fund Administrator shall determine each Eligible Claimant’s pro rata share of the Fair Fund based upon each Eligible Claimant’s Recognized Loss divided by the total of all Recognized Losses of all Eligible Claimants, multiplied by the total amount in the Net Available Fair Fund.  To avoid a windfall, the pro rata share will be capped at an amount equal to the Eligible Claimant’s Recognized Loss less any Prior Recovery. No Eligible Claimant shall receive a distribution payment unless his, her or its Recognized Loss calculated pursuant to the Plan of Allocation results in a payment that is equal to or greater than $10.00 (“Minimum Distribution Amount”). Claims that would result in a payment of less than $10.00 will not be paid.

Additional information can be found by visiting the “Important Documents” tab visible at the top pf this webpage and by contacting the Distribution Agent, toll-free, at 1-888-995-0214 or emailing info@eaglebancorpfairfund.com or mailing a letter to:

Eagle Bancorp Fair Fund
c/o JND Legal Administration
PO Box 91487
Seattle, WA 98111