Happy Thanksgiving

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It was 1621 when the Plymouth colonists and the Wampanoag Indians shared a fall harvest meal, regarded by most as the first Thanksgiving. It wasn’t until 1863, however, that President Abraham Lincoln proclaimed a national Thanksgiving Day.

Those very early colonists were faced with a harsh New England winter in their first year, which brought malnutrition, illness and death. The kindness of an American Indian who spoke English, which he learned during his time as an English sea captain’s captive, went a long way toward preventing more colonist deaths.

That man, Squanto, taught the colonists how to cultivate and collect food in their new homeland. He also helped them forge an alliance with the local tribe, the Wampanoag; an alliance that endured for more than 50 years.

Historians speculate that the 1621 Thanksgiving menu, shared between the settlers and their new friends, probably included fowl of some sort as well as deer and corn. With no oven and a dwindling sugar supply, cakes and pies were almost certainly not on the menu.

Despite the fact that approximately 90 percent of Thanksgiving meals now feature turkey, the wildfowl served at the first Thanksgiving meal was probably goose or duck.

As traditions have evolved, one or two lucky turkeys get pardoned by the U.S President each year, which started in the mid 20th century. Some state governors do the same for turkeys in their respective states. Over time, parades and volunteering have also became part of the U.S. Thanksgiving tradition.

However you celebrate Thanksgiving, whatever you include in your feast and whomever you invite to your table, from all of us at Regents Bank, we hope this Thanksgiving fills your heart, as well as your belly, and that we all reflect on the charity and friendship exemplified by that first Thanksgiving celebration.

Happy Thanksgiving.

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Government Guaranteed Loans and Helping Businesses Grow

leticia-scearce_biltmore-bankSecuring a business loan can be vital to a company’s growth or even survival. Senior Vice President Leticia Scearce, head of Grandpoint’s Government Guaranteed Lending division, shares some great loan options that are available through various government programs which can be facilitated by the Bank and its divisions, Regents Bank, The Biltmore Bank of Arizona and Bank of Tucson.

Q: What should people know about the government guaranteed lending programs that are available?

LS: Government guaranteed loans are there to help small- and medium-sized businesses, since these loans require less cash investment up front and offer longer loan terms. Government guaranteed loans can help bridge the gap for small- and medium-sized businesses that otherwise would not have access to capital.  Also, many businesses that could qualify for conventional loans opt for government guaranteed loans instead because they require less money down and have longer terms. When opting for guaranteed loans, clients usually pay two percent more in fees for 10 to 15 percent cash down versus the 30 percent down for conventional loans.

The most well-known government guaranteed loan programs are those offered by the Small Business Administration (SBA) loans.  These loan programs can include financing for owner-occupied real estate purchase or construction, refinance, equipment, business acquisition, exporting and short term working capital (revolving lines of credit).

Another very attractive loan program is available through the United States Department of Agriculture (USDA).  Eligible USDA loans can be for real estate and equipment (including renewable energy projects) in rural or farming areas and can have a loan term up to 30 years. In addition, there are a few subprograms under the USDA loan program umbrella that allow us to finance projects in urban areas that have a local foods component – food manufacturing, distribution, retail, etc. The USDA loan product is attractive because it offers the longest term of the government guaranteed loan programs; is more flexible in pricing and prepayment penalties; has less oversight with franchises and dealer agreements; and has less regulation overall. It needs to be mentioned that even though the program is offered under the U.S. Department of Agriculture, the financing of eligible projects / properties under this program do not need to be agriculture related.  Rather, its availability is contingent on the current population levels of a specific census tract in which the business or property will be located.

Q: What is the current status of government guaranteed lending?

LS: We’re hitting record levels of government guaranteed lending as the economy is improving. One reason is that the banks’ lending standards for conventional loans haven’t changed much since the recession, which makes guaranteed loans more attainable and attractive.

Q: Have you seen any big changes in the government guaranteed lending programs that business owners should know about?

LS: We saw a big change recently in the SBA 504 program. This product offers low cash down and a 20-year fixed rate on the client’s second loan, which is financed by the SBA. The agency now allows the client to refinance existing loans on owner-occupied real estate and allows some cash out provisions, helping the small business owner access capital for long-term working capital.

Q: How do the members of the government guaranteed lending program for Grandpoint Bank and its divisions work together to assist clients?

LS: We are tasked with helping all our regions expand our government guaranteed lending, which is a combination of SBA loans, USDA loans and export loans. I’m based in Phoenix at The Biltmore Bank of Arizona, along with Debbie Lindsay, our loan administrator. My team’s loan specialist/underwriter, Marchette Wesley, and portfolio servicer, Hector Palomares, are in California, and I travel to our offices throughout Arizona, California and Washington to train our staff about our guaranteed loan platform.  We assist our relationship managers in deepening their knowledge base with the different loan products we have available. We also train our credit staff so they can recognize when a conventional loan isn’t suited for a client and a government guaranteed loan could offer a great alternative.

Mark Phillips, Grandpoint Capital’s chief credit officer, and David Ross, Grandpoint Bank’s chief credit officer, and our regional bank presidents have been very supportive of our division and expansion.

Q: How is Grandpoint Bank, and its divisions, differentiating itself in this type of lending?

LS: Our Southern California and Vancouver, Washington markets do a lot of export business, so with our large geographic footprint and sizable lending capacity, we can target more middle market customers.   In Arizona, we have more rural opportunities, and thus the USDA programs are a great fit. We are already one of the top lenders in the state for USDA loans.  We are looking forward to expanding our footprint in USDA lending in all of our markets.   Seventy to 90 percent of government guaranteed loans don’t count against a bank’s legal lending limits, so we have more capacity to service larger companies as well.

Q: How did your career lead you to becoming the head of the government guaranteed lending division?

LS: I was drawn to SBA lending in 2007 when I was working in commercial lending at a community bank here in Scottsdale. I further progressed into this niche lending sector during the recession when the credit markets froze and guaranteed loans became even more essential. When I joined The Biltmore Bank of Arizona in 2011, I helped established the SBA department, and a year later I pushed for expansion into other government guaranteed loan programs such as USDA loans and export financing.  A diverse, more inclusive platform was important to our brand and to our customer base, and I was fortunate that key management at Biltmore trusted and supported my recommendations. In 2012, Biltmore Bank was acquired by Grandpoint Bank, and with the backing of a larger bank, it allowed us to expand our lending efforts even further.  Personally, Grandpoint gave me access to a larger platform with great management resources to help expand and develop this lending niche. Prior to the acquisition, our government guaranteed lending activity was small, but many of the banks acquired by Grandpoint around the same time had SBA loan portfolios, so my servicing and liquidation role increased. Soon thereafter, our senior management team decided to expand this niche of lending for the whole family of banks. I’m pleased to have a very amazing team. We all have to stay up to date on policies and procedures for all of these programs. This type of lending makes you a better banker, because it requires a complex level of understanding and mastery of detail; it makes you sharper.

Q: Are you involved in any civic work?

LS: I serve on the City of Phoenix Investment Advisory Board, which advises the city on its entire investment portfolio.

Q: What do you like to do for fun?

LS: My husband and I are into cycling, and I love to hike. I also enjoy cooking and baking, and I’m a wine connoisseur. We have visited more than 100 wineries, and I’d love to become a sommelier someday. More immediately, I’d like to look at growth and loan opportunities in the wine industries throughout the various regions we serve. I also enjoy reading, gardening, and I am a big tennis fan!

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Veterans Day, 2016

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Our great nation was founded on the belief that everyone is created equal and that life, liberty and the pursuit of happiness are inalienable rights. At times in our history, as will surely be the case in our future, brave men and women have been called upon to defend those rights and ideals.

Today we celebrate those individuals who have given their time, their skills and even their lives, to protect our safety, freedom and way of life.

To all the members of the United States military, past, present and future, thank you for your service. No one better demonstrates than you the closing line of the Declaration of Independence: “we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.”

Happy Veterans Day

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Regents Bank Celebrating 15 Years with Our Clients & Our Team

September marked 15 years in business for Regents Bank – our crystal anniversary. Much has happened in our world, our economy and our company during that time. We’re fortunate that valued clients and hard-working employees have been our constants, and we would like to give extra, special recognition to the following people:

Thank you to our legacy Regents Bank employees who have shared their talents with us since the beginning. They are our continuity and our inspiration.

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Pictured from left to right:
Dawn Stout, VP, Credit Applications & Data Administrator
Cecilia Wittmann, Client Service Specialist II
Claudia Sanchez, AVP, Client Service Officer
Darla Clark, EVP, Regional Manager
Pamela Cummins, Senior Loan Administration Specialist

Many clients have also been with us since we launched our bank, which we consider to be the highest form of compliment. Some of these legacy clients include:

La Jolla client:

grandeGrande Colonial Hotel

Amidst the pristine beaches and regal bluffs of La Jolla’s coastal village, the Grande Colonial Hotel has been welcoming guests since 1913. Completely modernized, yet faithful to its storied past, this intimate boutique hotel harkens back to a quieter, more dignified era, when travel meant something special and personalized guest service was a hallmark of every stay.

Vancouver clients:

scottThe Scott Horenstein Law Firm, PLLC

Since 1999, the Law Firm has assisted individuals and families throughout Washington in resolving family law conflicts. Their mission is to use their years of experience and considerable knowledge to resolve legal disputes both compassionately and completely.

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Horenstein Law Group, PLLC

HLG is a progressive law firm founded by Steve and Cindy Horenstein. HLG maintains all of the positive values clients expect from a traditional law firm, including excellent, well-trained lawyers, a high level work product and responsiveness. In addition, the firm is responding to new client needs and expectations that have evolved in part because of the economy. The prolonged recession has forever changed the practice of law. Clients now expect a higher level of service, billings based on value received and results obtained, as well as better access to lawyers and documents through client (not lawyer) focused technology.

screen-shot-2016-11-02-at-12-53-19-pmNBP Capital, LLC

Lauren and Spencer Noecker began their careers in the Los Angeles office at Marcus & Millichap before founding their real estate contracting and property management firm, NFN Investments, in Portland in 2007.

Lauren Noecker Robert is currently the Managing Member & Co-Founder of NBP Capital LLC. NBP Capital is a privately held commercial real estate fund with a focus on value-add, opportunistic investing on the West Coast. NBP Capital’s portfolio has over three thousand apartments and one million square feet of commercial assets across fifty properties. The fund is invested across all sectors: multifamily, office, hospitality, industrial, storage & retail.

Spencer D. Noecker is the original co-founder and an investor in NBP Capital LLC.  Mr. Noecker acted as Managing Member for the fund from 2008-2015 and co-built the portfolio of companies to service NBP Capital.  While Mr. Noecker remains invested in NBP Capital, he moved on to new opportunist ventures in 2015.  Mr. Noecker continues to consult for NBP Capital and sits on the Board of Advisors.

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Bean Investment Real Estate

Bean Investment Real Estate is a real estate acquisition and brokerage company established in 1946 by Ormond Bean, Jr. The company is currently owned and run by his son, Terry Bean. Terry has built on his father’s success and distinguished the firm as a leader in the multi-family real estate market.

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Don Heimbigner

Don Heimbigner is a businessman, inventor and philanthropist in his Vancouver, WA community. Don recently made the donation for the 9,000-square-foot project that will be built next to an existing 10-bed hospice care center, which will now be named the Elaine and Don Heimbigner Hospice Care Center. Fun Fact: Don invented bowling ball finger grip inserts in 1981. He is known and loved by all of the Vancouver banking team who enjoy seeing him every Friday for cookies!

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Don Holsinger

Don Holsinger owns and manages six commercial buildings and is developing two large land projects in Clark County. He graduated from University of Washington as a mechanical engineer and started home building in 1974.  He has banked with Tami Nesburg for 38 years in the Vancouver community. When Regents Bank was first established in Clark County, Don was first in line with his land development project and has been a client ever since.

“Regents Bank was extremely helpful navigating through the 2008 downturn and has continued to serve me well in the current economic environment.”

San Diego clients:

luckyLucky Line Products

Family owned for over 50 years, Lucky Line creates innovative products for keys, including tags, shapes, hardware and storage with a simple principle at the core of its operations: treat customers, suppliers & employees well to ensure long-term success.

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Discflo Corporation

Discflo leads the field in engineering pump solutions for hard-to-pump applications. Founded in 1982, the company has established a reputation for designing pumps to solve some of the industry’s toughest pumping problems, in categories as diverse as wastewater treatment, offshore oil platforms, pharmaceutical manufacturing and mining.

North County clients:

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The Arendsee Group

Richard Arendsee is the founder and a key principal of the Arendsee Group, a diversified owner and operator of apartment communities, primarily in the Dallas and Fort Worth area for the past 25 years. The Arendsee Group has diversified to include WAK Management, KAWA Insurance, Brandy Investments and others. Mr. Arendsee was previously the Chairman of the Board of California Community Bank, which Grandpoint Capital acquired and merged into Regents Bank in 2012. All of the companies under the Arendsee Group provide clean and safe housing to over 2,800 families and employ over 100 people.

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Pack Hyuhn, LLC

PackHuynh, LLC, is a franchising company that owns and operates 13 El Pollo Loco restaurants in San Diego, Los Angeles and Phoenix. The company was founded in 2011 by co-owners Maurice Pack and Phong Huynh. Each partner brings extensive expertise in franchising, experience with multiple restaurant brands and a strong track record of successful franchise management to the business.

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Peter Aardema

Mr. Aardema is an investor in commercial real estate properties located throughout San Diego County, where Mr. Aardema’s father first began buying land during the 1930s. Mr. Aardema owns and manages approximately 375,000 square feet of commercial-industrial property. He was a founding investor and advisory board member of California Community Bank, which Grandpoint Capital acquired and merged into Regents Bank in 2012. Mr. Aardema’s hobby interest is custom building overhead cam engines, which he installs in cars and hot rods that he and his drivers have been racing at El Mirage lake bed and Bonneville, Utah since 2001. They have set a handful of land speed records with his cars.

Thank you for being part of our community and letting us be part of yours. We are proud to be your business bank and a resource for your financial success. We look forward to celebrating many more milestones with you.

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Introducing Our New Multifamily Lending Division

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We’re happy to announce that we have expanded our service offerings once again.

Multifamily properties represent an important part of the housing market, especially as cities become denser and land constrained. Grandpoint Bank and its divisions, Regents Bank, Bank of Tucson and The Biltmore Bank of Arizona, now has a multifamily lending division, managed by Senior Vice President Karen Kim.

According to Karen, 2016 is expected to be another good year for the multifamily sector due to favorable demographic trends and economic growth, based on the Multifamily Outlook study completed by Freddie Mac.

“Demographically, the strong multifamily market is further bolstered by Millennials and empty nesters, who are increasingly choosing multifamily over single-family residences in many cities,” Karen says.

Karen’s multifamily lending team is comprised of experts in multifamily lending who have previously worked at institutions that have produced a large volume of multifamily portfolios for the past two decades or more.

Multifamily property owners and investors can access three-, five- and on a very limited basis, seven-year hybrid loans from our bank, as well as a six-month ARM loans. Qualifying properties include five or more units in Class A or B buildings, with Class C-type properties considered on a deal-by-deal basis. As portfolio lenders — meaning most of these loans remain with our bank — we have more control over our products and pricing, which is a huge advantage.

We’re working with a network of seasoned mortgage brokers throughout the markets we serve to educate them about how Grandpoint Bank and its divisions can help their clients finance or refinance properties up to approximately $15 million in loan value. Karen and her team are currently cultivating additional mortgage broker relationships in Greater Los Angeles area, San Diego County, Ventura County, Orange County, Portland, Vancouver, WA, Greater Phoenix area and Tucson.

Please contact Karen to inquire about becoming an approved broker with Grandpoint Bank.  You can also ask her to connect you to an approved broker already working with Grandpoint Bank.

Karen H. Kim, SVP, Multi-Family Lending Manager kkim@grandpointbank.com or (213) 542-2727.

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Thirteenth Consecutive 5-Star “Superior” Rating From BauerFinancial for Grandpoint Bank and its Divisions

screen-shot-2016-09-28-at-7-47-45-pmWe’re honored to share that Grandpoint Bank and its divisions, Regents Bank, Bank of Tucson and The Biltmore Bank of Arizona, received a thirteenth consecutive quarterly 5-Star “superior” rating from independent rating and research firm BauerFinancial,screen-shot-2016-09-13-at-11-07-51-am based on June 30, 2016 financial data filed with the government.

BauerFinancial, regarded as “the nation’s bank rating service,” gives the 5-Star rating only to banks that are considered the strongest in the nation, as assessed for strength, stability and soundness.

One of our core operating principles has always been to build long-term partnerships with our clients, so that our seasoned bankers can develop an in-depth understanding of their businesses and anticipate their needs. To our clients: Thank you for your trust, your support and your business.

According to BauerFinancial, to earn this highest rating level, institutions are required to maintain a tangible capital ratio of at least four percent, a tier 1 risk-based capital ratio of at least four percent and a total risk-based capital ratio of at least eight percent. Other criteria evaluated include: profitability/loss trend, evaluating the level of delinquent loans and repossessed assets, the market versus book value of the investment portfolio, regulatory supervisory agreements, the community reinvestment rating (CRA) and liquidity.

Banks cannot pay to be rated nor opt out of being rated by BauerFinancial. Four- and five-star banks appear on BauerFinancial’s Recommended Report.

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This icon appears next to every link that directs to a third party website not affiliated with Regents Bank. Please be advised that if you click this link you will be taken to a website hosted by another party, where you will no longer be subject to, or under the protection of, the privacy and security policies of Regents Bank. We recommend that you review and evaluate the privacy and security policies of the site that you are entering. Regents Bank assumes no liability for the content, information, security, policies or transactions provided by these other sites.

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What should you do if you fall victim to a BEC scam?

bec-scam-graphicBy Michael S. Kim, Randall Arthur AND Kelly Spatola

Re-printed with permission by the Association for Financial Professionals, www.AFPonline.org.screen-shot-2016-09-13-at-11-07-51-am

KEY INSIGHTS:

  • Time is of the essence. The faster you notify law enforcement and your bank, the better chance you have of recovering stolen funds.
  • Go local. Don’t forget to pursue fraudsters in the country where they and your stolen funds are located.
  • You’ll need a local lawyer to help you navigate local courts.

At our firm, we see an increasing amount of business email compromise (BEC) scams. Treasury and finance professionals see this as well—but what can they do after their organization has fallen victim?

How do I know if my company has fallen victim? Two of the most common types of frauds are CEO fraud and invoice fraud. The former is well known by now; variations include CFO fraud and treasurer fraud. The latter, invoice fraud, occurs when the IT system of a customer or supplier of your organization is hacked. The fraudsters will identify invoices due and payable by the company to the customer, then alter the payment details on the invoices and resend them to the company with a request to redirect payment to a new bank account, which is under the control of the fraudster. It is not uncommon for the fraudster to have been hacking into the relevant IT system for a number of months prior to committing the fraud in order to monitor e-mail traffic and thus be able to convincingly impersonate the executive or customer. All this is well known, and many organizations are taking steps to prevent BEC scams. But what happens when it occurs?

Where do stolen funds usually end up, and can a victim possibly recover such funds? Funds misappropriated through BEC scams can ultimately end up in any jurisdiction in the world (but almost never in the country in which the defrauded company is located). In our experience, misappropriated funds often end up in jurisdictions such as Hong Kong, China, Cyprus, various Eastern European countries and various African countries. Misappropriated funds can be transferred in and out of bank accounts in an instant. Thus, the longer it takes to discover a fraud, the less chance a company has of recovering its stolen funds. BEC scams generally are uncovered soon after they are committed; large and unusual transactions are red flags which can be noticed by senior management not targeted by the fraudsters. Invoice fraud often takes much longer to be discovered—usually when an unpaid supplier or customer raises queries as to payment of its invoices, which could be weeks or even months after the fraud has been committed. If your company has been defrauded, the key to recovering misappropriated funds is to take immediate action, both in your company’s local jurisdiction, as well as the jurisdiction to which the funds have been remitted. Any delays can severely jeopardize the chances of recovery.

What should a company do after discovering that it has been defrauded? Once a company discovers that it was the victim of fraudulent activity, it should take the following steps:

Immediately report the fraud to the bank from which funds were fraudulently transferred. Wire transfers are not always instantaneous. Rather, for a variety of reasons, the bank may delay processing a wire transfer—particularly a transfer of large sums of money. Such delays may give both the victim and the victim’s bank the opportunity to cancel or unwind a fraudulent transfer, if they act quickly enough. In our experience, companies that quickly discover and report fraudulent activity to their banks are more likely to recover stolen funds.

Report the fraudulent conduct to law enforcement agencies in the jurisdiction to which the funds were transferred. If possible, defrauded companies should contact these agencies at the same time as they contact their bank, because local police, including police in Hong Kong and China, may be able to freeze the account receiving the stolen funds, thereby stopping the funds from being withdrawn or further transferred.

Inform your company’s in-house counsel of the loss. In-house counsel will need to determine, among other things, whether the loss suffered is covered by the company’s existing insurance policies. If the loss is covered, your company should promptly inform its insurance company of the loss to ensure timely compensation under its policies.

Finally, retain local counsel in the jurisdiction to which the funds were transferred. Local counsel will be able to advise on the best legal strategy to recover the stolen funds—for example, commencing a civil proceeding to obtain a freezing order or a disclosure order. Local lawyers can also facilitate communications with local law enforcement agencies, as discussed in more detail below, thus increasing the chances of funds being frozen before they are further dissipated.

What is the best way to report to and follow up with local authorities? Communicating with law enforcement agencies in a different time zone and in a different language can be challenging and inefficient. Victims of fraud also often make the mistake of reporting crimes through an authority’s online reporting system, which can cause delays in processing the report (and thus increase the risk of the funds leaving the account before steps can be taken to freeze the account). We have found that taking the following steps will maximize a company’s chances of early and effective police intervention:

Contact law enforcement agencies through an agent that lives in the jurisdiction and speaks the native language—preferably local lawyers who are accustomed to dealing with the police and can quickly take steps to begin recovery of the stolen funds should they have been successfully frozen.

If possible, communicate with law enforcement officials face-to-face, as this will help in expediting their investigations.

Provide law enforcement officials with detailed information about the fraud and related wire transfers, including any and all evidence in support. For example, any email correspondence with the fraudsters and wire confirmations showing the name and bank accounts of the recipients.

How does a company obtain a freezing order from local courts? It is often the case that the victim of the fraud cannot (or does not want to) rely on local enforcement to freeze the recipient’s bank account. This may be due to the police not having sufficient powers in the relevant jurisdiction to freeze the account, or the amount that has been stolen is of a sufficient value that the victim wants take additional action to try and secure the funds. In this case, the victim should apply to the local court for a freezing order. Freezing orders—known as a Mareva injunction in Hong Kong or a property preservation order in China—prohibits the recipient of stolen funds from disposing of its assets, including withdrawing the stolen funds from the account. The bank will also freeze the account upon being served with such an order, making it impossible for the account holder to access the funds in the account. In most BEC and invoice fraud cases, the victim can apply for a freezing order on an urgent and ex parte basis—i.e., the victim is not required to notify the account holder about the application unless and until a freezing order is issued by the court. Although this significantly speeds up the process, note that it can take up to a day or two to compile all of the evidence needed and prepare the application, during which time funds can be transferred or withdrawn. It is thus important to retain local counsel early to aid in these efforts, so as not to further delay the process. Given their draconian nature, there are often potential obstacles and pitfalls to be to be aware of when preparing an application for a freezing order. While the standard for granting such an order is high in most jurisdictions, if the victim can produce concrete evidence of the fraud, most courts will be inclined to issue a freezing order, at least at the ex parte stage. Also, some courts require that the victim provide a sum of money to the court—i.e., a bond—to obtain a freezing injunction. Companies should discuss with counsel whether and under what circumstances a freezing order might be possible and what requirements will need to be met to make such an application.

How does a company obtain information about the whereabouts of the stolen funds? It is not uncommon for fraudsters to quickly and repeatedly transfer stolen funds to different banks in an attempt to evade detection. The most efficient way of tracing the funds is through the recipient banks themselves. Often, however, banks and the police are unwilling or unable to provide information about bank accounts without a court order. Therefore, consideration should be given to applying to the local court for a “disclosure order.” This is an order requiring the bank to provide information about the account holder and whether and where funds were subsequently transferred. This can either be done as part of the freezing order application or as a stand-alone application (if, say, for example, the victim has become aware that the funds are no longer in the account but still wants to trace the onward remittance of the funds). It should be noted that courts will often give banks a generous amount of time to comply with disclosure orders, typically seven to 14 days. Such delays may hinder tracing efforts, as it is very likely that fraudsters will continue to move the funds through different banks meaning it can often be difficult to locate the ultimate destinations of the funds. Again, it is important for a victim to move quickly when making a disclosure application in order to give itself the best chance of successfully tracing and freezing stolen funds.

What should a company do after the funds are successfully frozen? Once the stolen funds (or some portion thereof), are successfully frozen, a victim should commence civil proceedings against the recipient for the return of those funds. If the recipient does not appear or otherwise defend the proceedings and commits an act of default, then a judgment can be entered against the recipient. A victim can then seek to enforce the judgment by applying for a third-party payment order (also known as a garnishee order) against the banks where the funds are held. Such an order requires the bank to remit the funds in the account to the victim in satisfaction of the judgment.

Michael S. Kim is co-founder and Randall Arthur and Kelly Spatola are attorneys with Kobre & Kim.

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This icon appears next to every link that directs to a third party website not affiliated with Regents Bank. Please be advised that if you click this link you will be taken to a website hosted by another party, where you will no longer be subject to, or under the protection of, the privacy and security policies of Regents Bank. We recommend that you review and evaluate the privacy and security policies of the site that you are entering. Regents Bank assumes no liability for the content, information, security, policies or transactions provided by these other sites.

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We’re Working with You to Battle Cyber Crime

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Since 2013, cyber criminals have attacked over 22,000 businesses via business email scams with losses totaling over $3.1 billion. Businesses of any size are vulnerable. Experts estimate that 80% of cyber attacks are avoidable through basic cyber hygiene.  By implementing a variety of safety and prevention measures, you can significantly reduce the chances of your business suffering losses due to cyber crime.

To help businesses understand the risks and the ways they can help protect themselves from this growing threat, we recently hosted a cyber security seminar in San Diego. We want to share a few of the key takeaways from our panel of experts in law enforcement, information security and insurance. Here’s what we learned from Howard Miller, CRM, CIC, of L/B/W Insurance and Financial Services, Kimberly Pease, CISSP, of Citadel Information Group, Gary Hayslip, CISSP, CCSK, of City of San Diego and John Caruthers of the FBI’s National Security Cyber Squad.

  • Employee training throughout your organization is critical. Make sure you have clear policies about cyber security and that they are clearly communicated to your staff, contractors and anyone else who has the ability to expose your company to risk. Educate all of your employees about the risks of clicking on links in emails and sharing business information via phone or email with people they don’t know or trust.
  • Limit access to software to employees who really need it and make sure that each employee has their own log-in (don’t have employees share log-ins) so you can track activity back to a specific person.
  • Keep software updated regularly. Cyber thieves exploit vulnerabilities in older versions of software.
  • Use two-factor authentication to access your internet email and other sensitive applications such as online banking. Two-factor authentication requires you to use a one-time password in addition to your regular password, making it more difficult for hackers to hack.
  • Make sure your back-up files are capturing all of your critical data and that your employees are following your prescribed protocol for backing up their files. Also make sure you are backing up your files in a different physical location so you can use them in the event of a natural disaster.
  • Look at your third party vendor contracts to understand what cyber risk you might assume through your relationship with that vendor, particularly with cloud providers who typically accept little, if any, liability associated with cyber crime.
  • Take information security as seriously as operations and finance.
  • Create a VPN (virtual private network) to secure communications to your business network that are initiated by authorized employees using devices outside of your network.
  • Secure your wi-fi with a password and encryption.
  • Use different passwords for different sites and make them long and complex.
  • Check any existing cyber security insurance you may have to look for gaps or exclusions in the coverage. Business interruption is typically limited to physical causes so most insurance won’t cover business interruption due to a cyber attack.
  • Before your business is targeted by cyber criminals, establish a relationship with your local FBI office. They’re the lead federal agency for investigating these kinds of attacks.

For banking (online as well as offline), the following recommendations were made:

  • Use dual control for all ACH and wire transfers. Dual control means that another person or account has to authorize a transfer in addition to the person who initiates it.
  • Never trust wire instructions or other funds transfer instructions sent via email. Always call the person or company to verify the instructions.
  • Set up alerts that automatically notify you about log-ins, password changes, transfers, etc. This way if an unauthorized change is made, you know and can respond quickly.
  • Use Trusteer Rapport software (available free) to provide a secure web channel between your computer and the bank’s online banking site.
  • Use our ACH Fraud Protection Service, which enables business clients to review ACH transactions before they are complete and to choose to pay or return each item.
  • Use ACH blocks or restrictions, if you know you won’t be using these electronic payments, or if you want to limit ACH withdrawals to only specific vendors.

To address the risks of funds transfer fraud and cyber deception, our bank has also introduced a new way for our business banking clients to protect themselves through a first-of-its-kind cyber insurance group policy. The policy provides gap insurance, since most cyber crime insurance policies don’t cover losses for money sent out of a business banking account “voluntarily;” that is, when someone in your firm is tricked into sending funds to a cyber criminal posing as a trusted colleague or vendor. For more information on this policy, please visit grandpointinsurance.com.

Insurance Products are:
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Insurance Products are offered through Grandpoint Insurance Services, Inc., a non-bank insurance agency affiliate of Grandpoint Bank, and facilitated through LBW Insurance & Financial Services, Inc., an unaffiliated insurance agency.

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Regents Bank Welcomes Matthew Fishman as Assistant Vice President

Matthew Fishman new headshotWe’re happy to share that Regents Bank recently welcomed Matthew Fishman, who will serve as Assistant Vice President and Treasury Management Sales Officer.

Matthew will work with clients at Regents Bank offices throughout San Diego County and in Vancouver, Washington. His responsibilities include identifying how the Bank’s Treasury Management services can address specific client needs and delivering a full range of products. These include a comprehensive suite of fraud prevention, collection, disbursement and reconciliation services.

“Matthew is a tremendous addition to our team,” said Steve Sefton, President of Regents Bank, a division of Grandpoint Bank. “He has a proven track record of cultivating long-term relationships with clients that matches our mission to provide consultative advice.”

“Matthew has diverse experience with banks of all sizes,” said Annette Isaacs, Senior Vice President and Treasury Management Manager at Grandpoint Bank. “His product knowledge and business expertise will be a huge asset for our clients.”

Most recently, Matthew worked at City National Bank as an assistant vice president. He earned a bachelor’s degree in Economics with a minor in Business Administration from University of Arizona. He is working toward certification as a Certified Treasury Professional. Matthew’s professional affiliations include Association for Finance Professionals, BNI International and San Diego Chamber of Commerce.

He lives in the La Costa neighborhood of Carlsbad, along with his wife and their Rhodesian Ridgeback. Fans of outdoor activities, they enjoy hiking, skiing and traveling the world.

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