State Department of Financial Institutions Obtains Permanent Injunction Against Allied Boston BankState Department of Financial Institutions Obtains Permanent Injunction Against Allied Boston BankState Department of Financial Institutions Obtains Permanent Injunction Against Allied Boston Bank
SACRAMENTO – The California Department of Financial Institutions (DFI) obtained a permanent injunction against Allied Boston Bank (“Allied”) on June 26, 2001. Allied is an offshore bank licensed by the Republic of Palau.
“The injunction prohibits Allied Boston Bank from engaging in the banking business in California, said State Commissioner Donald R. Meyer. The injunction also prohibits Allied from operating a representative office, agency or branch and from using the word “bank” in its name without authorization from the Financial Institutions Commissioner. Allied stipulated to the permanent injunction.
On June 23, 2000, the Department issued a warning letter to Allied, and its Executive Vice President Jack Grover, to cease and desist from conducting banking business in California without authorization. The Department had learned that Allied might be engaged in the banking business in offices located in San Francisco.
Following the Department’s investigation, the matter was referred to the California Attorney General. The Department filed suit in San Francisco Superior Court on October 3, 2000, for violations of the Financial Code (Sections 3390, 3391, 3392, 1725, 1750). The Superior Court issued a temporary restraining order on October 6, 2000 and a preliminary injunction on November 28, 2000.
DFI is responsible for regulating the safety and soundness of California’s state-chartered financial institutions, including state-licensed banks, state-licensed savings and loans, trust companies, state-licensed offices of foreign banks, issuers of travelers checks and payment instruments (money orders), transmitters of money abroad, state-licensed credit unions, and state-licensed industrial banks. DFI reports to Secretary Maria Contreras-Sweet of the Business, Transportation and Housing Agency and Governor Gray Davis.