Commercial Bank Allegedly Violates Bond Redemption Regulations

ByJohn Lomicky

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Updated onMarch 19, 2019

This case involves US savings bonds worth $500,000 that were cashed at a bank in California without the knowledge or consent of the bond owner. The bank claimed that the owner of the bonds gave verbal permission for a coworker to come in and cash the bonds on her behalf. However, the owner of the bonds claimed she never gave this permission. The bonds were redeemed in the name of the coworker and not the bond owner. Furthermore, information that was allegedly required to be on bonds for redemption was missing. It was alleged that the bank cashed these bonds without proper identification or authority in violation of the US Department of Treasury’s regulations governing the redemption of bonds.

Question(s) For Expert Witness

1. Please describe your experience overseeing compliance at a commercial bank that offers savings bond redemption as a service.

2. What regulations must commercial banks follow when redeeming savings bonds?

Expert Witness Response E-089288

inline imageAs a former President, CEO, and Director of several successful commercial banks, I was involved in the origination, approval, oversight, and implementation of bank compliance programs. First and foremost, banks must adhere to specific federal regulations regarding cashing Savings Bonds. A bank must thoroughly follow regulatory requirements for cashing savings bonds as well as to adhering to their own policies and procedures. Failure to do so may result in losses to the bank. A bank may, at its board's discretion, institute additional controls that must be followed by the bank staff.

About the author

John Lomicky

John Lomicky

John Lomicky is a J.D. candidate at FSU Law with a multidisciplinary background. He earned his Bachelor's degree in Neurobiology and Near Eastern Studies from Georgetown University and has graduate degrees in International Business and Eurasian Studies. John's professional experience includes working in private equity as an Associate at Kingfish Group and in legal business development and research roles at the Expert Institute. His expertise spans managing sales teams, company expansion, and providing consultative services to legal practices in various fields.

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