FBI, SEC probe Wilmington Trust [View all]

Investigations allegedly involve fraud related to real estate loans

Once-venerable Wilmington Trust, a more-than-century-old banking institution taken down by bad real estate loans, is now the subject of an FBI criminal probe, and a federal grand jury has been impaneled to hear evidence, people close to the investigation say.

The U.S. Securities and Exchange Commission in New York also is pushing forward with its own investigation.

Wilmington Trust was swallowed up earlier this year by M&T Bank Corp. of Buffalo, N.Y., at a fire-sale price after an 11th-hour takeover deal was announced in November 2010.

The Delaware bank company's third-quarter financial information was so alarming that its businesses faced the possibility of "significant regulatory actions," the company said in its proxy statement. The announced sale price per share was about half the share price on the previous trading day. The sale resulted in shareholders' losing millions of dollars, including many small Delaware investors who had held on to thousands of shares of Wilmington Trust stock.

http://www.delawareonline.com/article/20111214/BUSINESS05/112140320/FBI-SEC-probe-Wilmington-Trust?