SEC Issues Cease-and-Desist Order Against Fifth Third for Alleged Violation of Reg FD

On November 22, 2011, the SEC announced that it issued a cease-and-desist order against Fifth Third Bancorp from committing or causing any violations or any future violations of, among other things, Regulation FD. The proceeding arises out of Fifth Third’s issuance of a redemption notice to the holders of a series of its trust preferred securities. The notice indicated a redemption price of about $25.00 per share at a time when the trust preferred securities were trading at about $26.50 per share. The SEC found that Fifth Third violated Regulation FD because it failed to consider how its decision to redeem the trust preferred securities would affect investors in the market for those securities and initially failed to publicly announce the redemption of the trust preferred securities, which the SEC determined was material nonpublic information.