BANKING & FINANCE - April 17, 1996

Shareholder Sues Bank Directors Over Alleged Fraud: Signet Banking Co.’s directors were negligent and should reimburse the bank for money allegedly lost in a fraudulent loan scam, a shareholder lawsuit claims. A former Philip Morris Cos. employee is accused of defrauding Richmond, Va.-based Signet and other banks of millions of dollars. The suit filed by shareholder Eugene Gold accuses the 12-member Signet board of “gross recklessness and waste of corporate assets.” Board member Norwood Davis Jr. said the board will aggressively defend the suit, which asks the directors to pay whatever the bank lost in the alleged fraud. Signet adjusted its 1995 earnings to account for a $35-million charge in connection with possible losses related to the case.