M&T Bank Corp. said the U.S. Securities and Exchange Commission and the Department of Justice are investigating financial reporting by Wilmington Trust Corp. before M&T bought the firm.
The SEC sent a Wells notice warning about potential regulatory action on Aug. 5, M&T said today in its quarterly filing. Wilmington responded on Sept. 20, according to Buffalo, New York-based M&T. The Justice Department’s probe involves Wilmington Trust’s financial reporting and securities filings, plus commercial real estate loans involving its subsidiary bank, the filing shows.
Either investigation could have civil or criminal consequences including “enforcement actions, fines, penalties, restitution or additional costs and expenses,” M&T said. A Wells notice gives a company the chance to dissuade regulators from taking action against the firm.
M&T also said it can’t assure that the pending takeover of Hudson City Bancorp will be completed by Jan. 31, according to the filing. M&T reached a deal in June with regulators to improve its controls amid a Federal Reserve probe into money laundering and postponed the Aug. 27 deadline for completing its acquisition of Hudson City.
M&T agreed to buy Paramus, New Jersey-based Hudson City for about $3.7 billion when the deal was announced in August 2012.
“We do not currently believe that any liability arising from these matters would have a material impact,” Michael Zabel, an M&T spokesman, said in an e-mailed statement. M&T slid 1.9 percent to $111.39 at 4 p.m. in New York.
M&T, which counts Warren Buffett’s Berkshire Hathaway Inc. among its largest shareholders, completed its purchase of Wilmington Trust in 2011 after the Delaware bank put itself up for sale amid losses fueled by soured commercial real estate loans and investments in pools of trust-preferred securities.
Peter Carr, a Justice Department spokesman, and the SEC’s John Nester declined to comment.