Misconduct by bank officers; suspension; removal
Section 12. If, after inquiry, the commissioner finds that any officer of any bank, including a director or trustee thereof, has violated any law related to such bank or has conducted the business of such bank in an unsafe or unsound manner or has used his official position in a manner contrary to the interests of such bank or its depositors or has been negligent in the performance of his duties, the commissioner may, by written notice to such officer detailing his reasons therefor, forthwith order his suspension. Any suspension so ordered shall become effective upon service of such notice upon the official involved and shall remain in effect until removed by the commissioner.
The commissioner may also, in his discretion, send a statement of facts upon which his conclusion is based relative to the conduct of the official involved, to the executive officer and each director or trustee of the bank affected. Within such reasonable time as the commissioner may direct, a special meeting of the directors or trustees of the bank shall be held with respect to the statement of the commissioner. If, in the opinion of the commissioner, appropriate action is not taken to protect the interest of the bank or its depositors, or if such conduct is continued, the commissioner shall cause notice to be served on such officer, director or trustee, to appear and show cause why he should not be removed from office. If, after granting the officer, director or trustee so summonsed a reasonable opportunity to be heard, the commissioner finds that he has been guilty of any such delinquency, the commissioner, in his discretion, may order that such officer, director or trustee be removed from office and from participation in the management of such bank.
In either of the foregoing instances, a copy of any such notice shall be sent by registered mail to each officer, director or trustee of the bank affected. A copy of any such notice shall be sent to a board composed of the state treasurer, the attorney general and the commissioner of revenue. The members of the board, or a duly authorized representative, shall be present at any appearance of such officer, director or trustee. Any decision by the commissioner to suspend or remove such officer, director or trustee may be reversed by a decision of a majority of the members of the board made within five business days after the commissioner’s decision; provided, however, that in the absence of any such reversal, any such decision of the commissioner shall be given full force and effect. Copies of such order shall be served upon the delinquent officer and upon such bank, whereupon such officer shall cease to be an officer of such bank and shall not participate in any way, in the management thereof; provided, however, that any such order, and the evidence and findings of fact upon which it is based, shall not be made public or disclosed to anyone except the delinquent officer and the other officers, directors or trustees of such bank, other than in the course of any judicial proceeding under this section. The commissioner shall thereupon transmit to the attorney general a transcript of the evidence and finding, and the attorney general shall institute such proceedings as he may deem necessary and proper. Any person suspended from office as herein provided who, during the term of his suspension, participates in any manner in the management of any bank in the commonwealth shall be punished by a fine of not more than one thousand dollars or one year in jail, or both. Any person removed from office as herein provided who thereafter participates in any manner in the management of any bank in the commonwealth shall be punished by imprisonment in the state prison for not more than five years or by a fine of not more than five thousand dollars, or both.
Within twenty days after the service of an order of suspension or removal under this section upon the person removed thereby, such person may file a petition in the supreme judicial court for Suffolk county for a review of such suspension or removal but, pending such review, the order shall remain in full force and effect. The court shall have jurisdiction in equity to annul, reverse or affirm any such order, shall review all questions in accordance with the standards for review provided in paragraph (8) of section fourteen of chapter thirty A and may make any appropriate order or decree. The decision of the court shall be final and conclusive.