An Illinois bank holding company will pay a $1 million civil money penalty (CMP) after suffering a $2.7 million loss due to weak internal controls, failure to supervise staff and a lack of segregation of duties connected to a bank owned by the company, the Federal Reserve said Thursday.
The Fed said that Wintrust Financial Corp. of Rosemont, Ill., was assessed the $1.012 million CMP after the company – for eight years, starting in 2008 – did not address a failure by the chief financial officer of Wintrust-owned Hinsdale Bank and Trust to perform a daily reconciliation of a loan-related general ledger account, which carried an unreconciled balance of more than $2 million. The Fed said that Wintrust was aware of the CFO’s failure to perform the reconciliation.
By the time the firm did address the issue, in 2015, the firm had lost $2.7 million as a result of the internal control and other deficiencies, and through “a lack of written policies and procedures, which permitted Hinsdale’s then-CFO to engage in improper accounting practices in an attempt to conceal the unreconciled balance until March 2015.”