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Larry D. Thompson - Bush Aide Led Co. Accused of Fraud

Larry D. Thompson - U.S. Corporate Watchdog Served At Troubled Firm

Larry D. Thompson, deputy attorney general and head of a new multi-agency corporate-crime task force, was a Providian Financial Corp. board member and chairman of its audit and compliance committee from June 1997 until his unanimous confirmation by the Senate on May 10, 2001.
Thompson sold all his stock -- worth nearly $5 million -- in Providian after his confirmation to comply with ethics rules. The sale came a few months before Providian began to disclose looming problems with defaults in its credit card portfolio, problems that led to a collapse of its stock price and the layoffs of thousands of employees.
Thompson did not return calls for comment.
Thompson's service on the Providian board coincided with the time regulators said Providian engaged in fraudulent conduct.
Thompson held 89,651 shares, including unexercised options, on March 12, 2001. On the day he took office, May 10, that stock had a market value of more than $4.7 million.
Insider trading has become an issue in shareholder and employee lawsuits against Providian.
In July 2001 -- after Thompson left the board -- former Providian chief executive Shailesh J. Mehta sold 75,000 shares for $3.7 million. David R. Alvarez, former president of Providian's integrated-card unit, exercised his stock options in the summer and fall of 2001 and realized a $12.2 million profit. Several other offices and directors sold stock that summer, as well. Providian's stock price began to plunge -- it hit a 52-week high of $59.85 in July -- after a Sept. 4, 2001, announcement that Providian's third-quarter earnings would be lower than expected. The stock eventually hit a low of $2 a share in November and closed trading yesterday at $4.65.
Thompson, a former U.S. attorney in Georgia and partner and defense lawyer at the Atlanta law firm King & Spalding, was not questioned about his role at Providian during his public confirmation hearing.
Providian agreed to a $300 million settlement in June 2000 with the Office of the Comptroller of the Currency. The settlement is "by far" the largest ever reached by the bank regulator.
Six months after the Comptroller of the Currency settlement, the company paid $105 million to settle the same allegation in a class-action suit filed on behalf of its customers.
In March 2002, Providian paid $38 million to settle a class-action lawsuit brought by shareholders in 1999.
Providian officers and directors, including Thompson, are defendants in a current class action lawsuit brought by more than 10,000 Providian employees.

LOL! It's another one of those brilliant moves by Bush. It's a strategy only they can comprehend.