Klayman & Toskes, PA and Carlo Law Offices Comment on Recent Bank FDIC Corrective Action Directive to Doral Financial Corpora...
February 02 2015 - 5:53PM
The Securities Arbitration Law Firm of Klayman & Toskes
("K&T"), www.nasd-law.com, and Carlo Law Offices, commented
today on the recent announcement by the Federal Deposit
Insurance Corporation (FDIC) concerning Doral Bank, a
wholly-owned subsidiary of Doral Financial Corporation (NYSE:DRL).
The FDIC announcement relates to the further deterioration of Doral
Bank's financial condition, the primary enterprise of Doral
Financial Corporation. For investors, there are implications for
Doral Financial Corporation issued preferred trust securities that
were ultimately offered to investors with secured notes in the
Puerto Rico Conservation Trust Fund. As the ultimate guarantor for
the Puerto Rico Trust Fund Secured Notes, Doral Financial
Corporation's financial condition directly impacts the default risk
to note holders.
On January 26, 2015, Doral Bank received notification of a
Prompt Corrective Action Directive from the FDIC, effective
immediately. The directive requires Doral Financial Corporation's
subsidiary bank, "to promptly (i) increase the amount of its Tier 1
capital to a level sufficient to restore the Bank to the capital
category of "adequately capitalized" under Section 38(b)(1)(B) of
the Federal Deposit Insurance Act; and/or (ii) accept an offer to
combine with another insured depositary institution." The
significance of this development, according to securities attorney
Steven D. Toskes, is that "Puerto Rico investors should understand
that the credit rating on the Puerto Rico Conservation Trust Fund
Notes is derived from the credit rating of the guarantor, Doral
Financial Corporation, not from the Puerto Rico government or any
agency. This is the source of the default risk."
Klayman & Toskes, PA and the Carlo Law Offices are dedicated
to the rights of Puerto Rico investors. Puerto Rico investors who
suffered losses as a result of FINRA sales practice violations may
be able recover their losses in a FINRA arbitration claim.
About Klayman & Toskes
Klayman & Toskes, a leading securities and litigation law
firm, practices exclusively in the field of securities arbitration
and litigation, on behalf of retail and institutional investors.
The firm represents investors throughout the world in securities
arbitration and litigation matters against major Wall Street
brokerage firms.
CONTACT: Klayman & Toskes, P.A.
Steven D. Toskes, 787-919-7325
stoskes@nasd-law.com
www.nasd-law.com