FINAL ENFORCEMENT DECISION ISSUED BY THE BOARD OF GOVERNORS.In the Matter of Guillaume Henry Andrew Fonkenell An Institution-Affiliated Party of
Bankers Trust The Bankers Trust is a historic American banking organisation that was acquired by Deutsche Bank in 1998.
It was originally set up when banks could not perform trust company services. Company New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New York
Docket A written list of judicial proceedings set down for trial in a court.
To enter the dates of judicial proceedings scheduled for trial in a book kept by a court. Nos. 98-032-B-I, 98-032-CMP-I
Determination on Request for Private Hearing
This is an enforcement proceeding brought by the Board of Governors of the Federal Reserve System Board of Governors of the Federal Reserve System
The managing body of the Federal Reserve System, which sets policies on bank practices and the money supply. (the "Board") against Guillaume Henri Andre Fonkenell (the "Respondent") pursuant to the Federal Deposit Insurance Act (the "FDI FDI
See: Foreign direct investment Act"). Respondent is a former Vice President of Bankers Trust Company, New York, New York. In a Notice of Charges and of Hearing and Notice of the Assessment of a Civil Money Penalty (the "Notice") issued October 29, 1998, the Board alleged that Respondent violated the law, breached his fiduciary duty Noun 1. fiduciary duty - the legal duty of a fiduciary to act in the best interests of the beneficiary
legal duty - acts which the law requires be done or forborne , and engaged in unsafe and unsound unsound
said of an animal, usually a horse, which has been examined for soundness and found to be unsatisfactory. banking practices in connection with the marketing and sale of leveraged derivative transactions. The Notice seeks a cease and desist order An order issued by an Administrative Agency or a court proscribing a person or a business entity from continuing a particular course of conduct.
The force and effect of a cease and desist order are similar to those of an Injunction issued by a court. and a civil money penalty against the Respondent.
In accordance with section 8(u)(2) of the FDI Act, 12 U.S.C. 1818(u)(2), the Notice advised the Respondent that any hearing held in this matter would be public, unless the Board determined that an open hearing would be contrary to the public interest. The Notice informed Respondent that he could submit a statement detailing any reasons why the heating should not be public. On January 14, 1999, Respondent duly filed a motion with the Board seeking a private hearing in this matter. Board Enforcement Counsel opposed the motion.
In a recent case, In the Matter of Incus incus /in·cus/ (ing´kus) [L.] the middle of the three ossicles of the ear, which, with the stapes and malleus, serves to conduct vibrations from the tympanic membrane to the inner ear. Called also
Specifically, the Board ruled that:
Before the Board exercises its discretion to close a heating, there should be a substantial basis for concluding that the case reflects unusual circumstances that overcome the presumption in favor of open hearings. In general, in light of the congressional requirement that the proceeding be open unless "contrary to the public interest," those circumstances should involve serious safety and soundness concerns flowing from a public hearing.... [A] party seeking a closed heating should be required to demonstrate how the effects of this proceeding differ so significantly from those involving other banks in terms of the public interest as to warrant special treatment. Slip. op. at 3-4.
Respondent's arguments do not meet the standard set out in the Incus case. Respondent asserts that a private hearing would protect materials obtained by the Board and the Securities and Exchange Commission in the course of their investigations and maintained under seal by those agencies, and would protect the privacy and reputations of persons and firms whose conduct was the subject of investigation. He also claims that a closed hearing would assist him in obtaining information from persons who may resist providing evidence without adequate confidentiality protections. Finally, he asserts that holding the hearing in private would expedite and simplify the hearing process.
These arguments are insufficient to overcome the congressional presumption of open hearings in enforcement matters. To the extent law enforcement agencies A law enforcement agency (LEA) is a term used to describe any agency which enforces the law. This may be a local or state police, federal agencies such as the Federal Bureau of Investigation (FBI) or the Drug Enforcement Administration (DEA). need to protect the confidentiality of a particular document, existing regulations relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc hearing procedure provide an adequate means to do so. See 12 U.S.C. 1818(u)(6); 12 C.F.R. 263.33(b). Respondent's argument that the privacy interests of third parties would be impaired by a public hearing fails to present reasons why it would be contrary to the public interest to hold an open heating. See Incus, slip op. at 4-5. With respect to Respondent's claim that a private hearing would assist him in obtaining necessary evidence, the administrative law judge administrative law judge n. a professional hearing officer who works for the government to preside over hearings and appeals involving governmental agencies. They are generally experienced in the particular subject matter of the agency involved or of several agencies. handling the proceeding is empowered to issue subpoenas requiring production of documents and attendance at depositions or at the hearing. 12 C.F.R. 263.26, 263.27, 263.34(a). Finally, as the Board has previously held, the argument that "a private hearing is likely to be resolved more efficiently than a public hearing ... could be used to justify a private hearing in most enforcement cases, a result that would be inconsistent with the intent of the statute." In the Matter of Zbinden, 80 Federal Reserve Bulletin 360, 362 (1994).
Accordingly, Respondent's request for a private heating is denied.
By Order of the Board of Governors, this 29th day of March, 1999.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
JENNIFER J. JOHNSON Secretary of the Board3