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Matter of Seidman

filed: September 14, 1994.


On Petition for Review of a Final Order of The Office of Thrift Supervision, United States Department of the Treasury. (OTS Order No. 92-149). Appeal from the United States District Court for the District of New Jersey. (D.C. Civil Action No. 92-00505).

Present: Stapleton, Hutchinson, and Roth, Circuit Judges.

Author: Hutchinson


HUTCHINSON, Circuit Judge.

In these consolidated cases, Lawrence Seidman ("Seidman") and John Bailey ("Bailey") petition for review of the order of the Director ("Director") of the Office of Thrift Supervision ("OTS") subjecting them to administrative sanctions for their part in a loan transaction Crestmont Federal Savings and Loan ("Crestmont") considered while Seidman was Chairman of Crestmont's Board of Directors ("Board") and Bailey was one of its officers. Specifically, Bailey petitions for review of that portion of the Director's order publicly directing him to cease and desist from participating in unsafe and unsound lending practices. Seidman's petition seeks review of that portion of the Director's order removing him from his office at Crestmont and banning him from further participation in the banking industry.

When the Director issued the order against Seidman and Bailey, he remanded the case to an administrative law Judge ("ALJ") to determine their ability to pay civil monetary penalties because the ALJ who had heard the case failed to assess a civil penalty against Bailey and to properly document Seidman's ability to pay the $930,000 civil penalty the ALJ had recommended. The remand order raises a question of finality that we must consider before deciding whether we have jurisdiction to review Bailey's and Seidman's petitions. We conclude in Part II that we do have jurisdiction.*fn1

In the administrative proceeding, the Director found Bailey approved a commitment for a purchase money mortgage to a real estate buyer who was buying property from a seller in which Seidman had an interest. The Director concluded that approval of this commitment was an unsafe and unsound lending practice justifying a cease and desist order against Bailey under section 1818(b) of the Federal Deposit Insurance Act ("FDIA"), 12 U.S.C.A. §§ 1811-1833 (West 1989 & Supp. 1994), as amended by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), P.L. No. 101-73, 103 Stat. 183 (1989).

The Director concluded that Seidman's conduct required him to issue a prohibition and removal order in accord with 12 U.S.C.A. § 1818(e). To support this ultimate administrative sanction the Director found Seidman impermissibly used his position at Crestmont for his own benefit in order to obtain a release from his personal guarantee of a loan; this loan had been made by another lending institution to a real estate partnership from which Seidman was in the process of withdrawing; Seidman's withdrawal from the partnership was being negotiated at the same time that Bailey made the loan commitment for a purchase from the partnership, resulting in the Director's cease and desist order against him. As additional support for his order removing Seidman from Crestmont's Board of Directors and banning him from banking for life, the Director also found that Seidman failed to renotify Crestmont's Board or Senior Loan Committee of his continuing interest in the real estate partnership he was withdrawing from while they were considering the loan OTS objected to and that Seidman later attempted to hinder the ensuing OTS investigation by covering up his part in preparing a memo in support of his request for the release. The Director concluded that each of these findings warranted Seidman's removal as Chairman of Crestmont's Board and required him to be permanently barred from banking.

We believe the Director erred in concluding Bailey's issuance of a purchase money loan commitment to a buyer from the real estate development partnership from which Seidman was in the final stages of withdrawing exposed Crestmont to the serious, abnormal risk that constitutes an unsafe or unsound practice. Therefore, we will grant Bailey's petition for review and vacate that part of the Director's order commanding Bailey to cease and desist from such practices.

We reject Seidman's preliminary argument that 12 U.S.C.A. § 1818(e) violates due process because it fails to afford him a trial before a fair and unbiased tribunal. We conclude, however, that the Director's findings that Seidman violated 12 U.S.C.A. § 1818(e)(1) when he sought to utilize his position at Crestmont to obtain a release from his guarantee and when he failed to remind Crestmont's Board or Senior Loan Committee of his interest in the real estate partnership are not supported by substantial evidence. Though the Director properly determined that Seidman engaged in an unsafe or unsound practice when he attempted to hinder the OTS investigation, we conclude that there is no evidence to support the Director's finding that this act of Seidman resulted in his receipt of an actual benefit meeting section 1818(e)(1)(B)(iii)'s condition of an untoward or prohibited effect.*fn2 Accordingly, we will grant Seidman's petition for review and vacate that part of the Director's order permanently removing him from his job at Crestmont and banning him from banking. Nevertheless, because of our Conclusion that Seidman did commit an unsafe or unsound practice when he unsuccessfully attempted to hinder the OTS investigation in his dealings with his former partners and their lender, we will remand the case to OTS for the Director to consider entering a cease and desist order and civil monetary penalties against Seidman as authorized by section 1818(b).

Our Disposition of the merits of Seidman's petition requires us to vacate the OTS preliminary suspension order for the reasons given in Part VII of this opinion. Therefore, we find it unnecessary to consider Seidman's appeal of the district court's order dismissing, for lack of jurisdiction, his action to enjoin the preliminary suspension order.

I. Factual and Procedural History

A. Seidman's Business Dealings

Lawrence Seidman is an attorney in his mid-forties who has been engaged in the practice of banking and securities law for twenty years. During the past decade he has specialized in real estate investments and begun to pursue a career in banking. In 1989, he headed a group of investors who purchased stock in Crestmont, a thrift institution in Edison, New Jersey.*fn3 Seidman became a director of Crestmont and, in November 1989, was named Chairman of its Board of Directors.

In 1986, before he became a Crestmont director, Seidman formed a partnership, Fulton Street Associates ("FSA"), with James Zorlas ("Zorlas") and Lawrence Rappaport ("Rappaport") to purchase and develop industrial condominiums on a piece of commercial property ("Boonton Project"). FSA's partners made substantial capital contributions to the Boonton Project and obtained additional financing from United Jersey Bank ("UJB"), secured in part by all the partners' personal guarantees. Seidman listed his affiliation with FSA on conflict disclosure forms he filed with Crestmont when he became a director.

In mid-1990, Seidman decided to focus his business activities on Crestmont. Recognizing that his outside business ventures could create conflicts that would prevent Crestmont from making otherwise desirable loans, Seidman advised the Board that he had begun to withdraw from his outside business ventures and started disposing of various business interests to his former partners. Rappaport agreed to acquire Seidman's interest in FSA, promising to indemnify Seidman against any continuing obligation on FSA's loan from UJB without any further consideration flowing to Seidman. On June 1, 1991, Seidman's transfer of his interest in FSA to Rappaport became the subject of a formal agreement. Seidman testified that he lost all of the $320,000 he had invested in FSA but that he thought Crestmont offered even greater potential for profit.

Months before the June 1st agreement, however, UJB started to worry about its loan to FSA. On January 21, 1991, it sent FSA a notice of default. UJB gave FSA a chance to cure the default, but FSA denied it was in default, contending any default would have been cured if an interest reserve fund had been properly credited against its debt. Though UJB then sent FSA a demand for immediate payment, negotiations between them continued.

James Risko ("Risko"), a Poole & Co. commercial loan broker, handled negotiations to resolve the dispute between FSA and UJB. Poole & Co. was the commercial loan company that had placed the FSA loan with UJB. Roger Eberhardt ("Eberhardt"), chairman of UJB's real estate management committee, and Thomas Stackhouse ("Stackhouse"), the UJB commercial lending officer assigned to the FSA loan, were key participants in the negotiations. Risko, Eberhardt and Stackhouse all testified that the participants, including Seidman, discussed end-user financing for FSA's Boonton condominiums.*fn4 Crestmont was mentioned as a potential source of end-user loans, but no one testified that Seidman or Crestmont promised to make any loan. On May 20, 1991, the parties agreed to restructure the UJB loan. As part of the restructuring, the FSA partners, including Seidman, signed personal guarantees covering $4.45 million. Seidman's successful efforts to be released from the guarantee figure prominently in these proceedings, but other ongoing events also play a significant role.

B. The Levine Loan

John Bailey is the Executive Vice President of Crestmont. His responsibilities include underwriting commercial loans, managing a commercial loan portfolio, producing new lending business and supervising Crestmont's loan officers. Bailey had authority to approve loans of less than $500,000 if they did not directly involve the interests of Crestmont's directors but had no authority to approve loans in excess of $500,000 or loans in which Crestmont's officers or directors had an interest. Loans over $500,000 went before a "Senior Loan Committee" made up of Bailey, Seidman and Crestmont's President, S. Griffin McClellan ("McClellan"). Commercial loans in which an officer or director had an interest were prohibited at Crestmont.

In December of 1990, Steven Levine ("Levine") of S & N Realty approached Bailey about end-user financing for a $466,000 office condominium in FSA's Boonton project. Levine, who had been referred to Crestmont and Bailey by Zorlas, sought $375,000. On December 18, 1990, Bailey contacted Zorlas, Rappaport and Seidman about Levine's loan request and asked them how things stood on Seidman's partnership interest in FSA. All three FSA partners individually represented to Bailey that Seidman was in the process of withdrawing from the partnership and that the withdrawal would be completed "shortly." Bailey Appendix ("Bailey App.") at 319. Bailey memorialized this conversation and placed a memo about it in a file marked "Seidman Financial Associates." Id. Rappaport testified he told Bailey no loan could be made to Levine until Seidman was out of the partnership.

Assured Seidman would soon be out of FSA, Bailey decided to get a head start on the Levine loan and assigned James Little ("Little"), a Crestmont loan officer, the task of writing it up. Little interviewed Levine and told him the loan could be approved but no other action could be taken on it until Seidman left FSA. Little became involved with other things and gave the paperwork on the loan back to Bailey to complete. Still assured that Seidman would soon be out of FSA, Bailey did extensive work on it.

Bailey prepared a Credit Summary for the Levine loan on February 21, 1991.*fn5 On March 19, 1991, Bailey and Little approved the loan and issued a commitment letter to Levine.*fn6 Levine did not sign the commitment letter until May 30, 1991, when Bailey was given a check for $2,000 in exchange for the commitment.*fn7

C. Crestmont's Loan Policies

Crestmont had a loan policy which Bailey had authored. It was based on OTS regulations and stated:

The policy of the bank is to carefully administer extensions of credit which are subject to special reporting requirements. These loans include the following:

- Loans to individuals or entities that conduct business or have conducted business with officers or directors of the bank.

These situations are clearly described in the bank's loan committee credit summary. They are presented to the bank's Senior Loan Committee regardless of their size.

Id. at 314. Crestmont had another policy, also based on OTS regulations, which forbade it from

either directly or indirectly making any loan to or purchase . . . any loan made to any third party on the security of real property purchased from any affiliated person of the association unless the property was a single-family dwelling owned and occupied by the affiliated person as a permanent residence.

OTS Appendix ("OTS App.") at 96-97 (citing 12 C.F.R. § 563.43(c)(1)). Crestmont's policies also put on its directors

a fundamental duty to avoid placing themselves in any position which creates, leads to or could lead to a conflict of interest or even the appearance of such conflict of interest between the accomplishment of the purposes of the association and the personal financial interests of the directors, officers and other affiliated persons.

Id. at 98-99 (citing 12 C.F.R. § 571.7). Specifically, Crestmont's directors were supposed to avoid any transaction in which

a third party purchaser seeks to obtain a loan from the association secured by real estate acquired from the affiliated partnership or as to which the affiliated partnership holds a security interest.

Id. at 100. Bailey and Seidman were fully aware of these policies.

D. The Garden Park Loan

At the same time that Crestmont was negotiating the Levine loan, Seidman and OTS were engaged in a tense dialogue over property owned by Garden Park Associates ("Garden Park"), for which Seidman was attempting to arrange financing at Crestmont. Seidman had an interest in Garden Park and had also personally guaranteed the development loans for Garden Park. Seidman fully disclosed his interest in Garden Park to the Crestmont Board and Crestmont formally asked OTS to permit it to make the Garden Park loan. On May 23, 1991, OTS denied Crestmont's request citing 12 C.F.R. § 563.43(c)(1) (1991) which forbade certain transactions with affiliated parties.*fn8 Seidman contacted OTS's Chief Examiner in charge of Crestmont, Joseph Donohue ("Donohue"), for a further explanation of OTS's position. Donohue told Seidman that OTS considered the Garden Park loan impermissible so long as Seidman remained a guarantor of Garden Park's obligation. Seidman asked for reconsideration, but OTS still refused to allow the loan.

E. Seidman's Release from the UJB Guarantee

Until his May 23, 1991, conversation with Donohue, Seidman seems to have believed that his withdrawal from FSA would permit Crestmont to make the Levine loan. After speaking with Donohue about Garden Park, Seidman had second thoughts about his personal guarantee of FSA's loan from UJB and began to wonder whether it would disqualify Crestmont from loaning money to Levine even after Seidman completed his withdrawal from FSA. Seidman turned to James Poole ("Poole") of Poole & Co., who advised Seidman to get a release from the UJB guarantee and to discuss this with Risko. Seidman did so and Risko approached Eberhardt. Risko told Eberhardt that the conflict between Seidman's obligation on the guarantee and his fiduciary duties to Crestmont created problems in Crestmont's providing end-user financing for the FSA project. Eberhardt told Risko to put a proposal for Seidman's release in writing and UJB would consider it.

Events now moved rapidly. On May 30, 1991, the day Levine signed the commitment letter, Risko contacted Seidman and told him UJB would consider releasing Seidman. Risko suggested Seidman draft a letter asking for the release and that he, Risko, would sign a letter giving UJB the reasons for granting Seidman's request. Risko testified Seidman and he agreed that Seidman would do an initial draft of both the request for release and Risko's supporting letter. Risko testified he was only to approve and sign the supporting letter and that Seidman faxed him the draft. Seidman testified that Risko dictated the draft to Seidman's secretary and she forwarded it to Risko for review.

While drafts were being faxed back and forth between Risko and Seidman, OTS examiner Thomas Angstadt ("Angstadt") was at Crestmont on other business. While using a Crestmont fax machine, Angstadt saw a copy of the draft of Risko's letter lying on a desk. Angstadt secretly read and copied the draft.

The final version of Risko's letter was identical with the draft except for one sentence that Risko added.*fn9 Seidman had no objection to Risko's addition.

On June 7, 1991, UJB notified Seidman that it would release him from his guarantee of FSA's loan. Eberhardt later testified UJB understood that the release did not obligate Crestmont to provide such financing, but he prepared a handwritten memo that indicated availability of end-user financing from Crestmont was a consideration in UJB's decision to release Seidman.

In the meantime, on June 3, 1991, OTS prohibited the Garden Park loan, and Seidman again asked Donohue for an explanation. Donohue now told Seidman that OTS believed conflict of interest prevented a thrift from making a loan to an entity in which an officer or director of the thrift had had an interest, including liability on a guarantee, at any time within two years before the loan was made. Seidman protested that such a policy had no support in OTS regulations, but Donohue was not moved.

Frustrated, Seidman ordered Bailey to stop considering commercial loans on projects in which Seidman had an interest either as a partner or guarantor. On June 4, 1991, Bailey sent both the Levine and the Garden Park loans to the Savings Bank of Rockland.*fn10 On June 5, 1991, OTS issued a supervisory directive forbidding Crestmont from making any commercial loans and launched the investigation for "conflict of interest" that gave rise to the cases now before us.*fn11 It is undisputed that Crestmont never made the loans OTS questioned.

F. The OTS Investigation, Charges and Seidman's District Court Action

Though Crestmont had made no prohibited loan and now proposed none, OTS went on with its investigation into what it suspected were violations of OTS's regulations on conflict of interest. On September 13, 1991, OTS deposed Seidman, focusing on the draft letter Seidman had faxed to Risko. Seidman never admitted writing the original draft of Risko's letter. He said he believed that Risko had dictated it over the phone to Seidman's secretary, Janet Greenhill ("Greenhill"). Greenhill testified she did not remember these details.*fn12 Seidman admitted that he had approved the text of the letter as sent with the additional sentence stating it would be in UJB's best interest to free him from the guarantee because that could open another source of end-user financing for FSA.

After he was deposed, Seidman learned that Risko and Poole & Co.'s records had been subpoenaed by OTS and that Risko planned to testify on deposition without an attorney. Seidman called Risko to find out what Poole & Co.'s files contained concerning Seidman's request for a release from his guarantee and asked whether he could review the file. Risko testified he told Seidman that he had a fax of the initial draft along with the fax sheets showing it was transmitted from Crestmont.

On September 16, 1991, before his OTS deposition, Risko met with Seidman. Seidman testified Risko told him he was going to tell OTS the letter was Seidman's idea. Seidman testified he told Risko this was a lie. Seidman said he reviewed the file and pulled out a number of documents relating to his request for a release. Risko testified Seidman asked him to "make sure that [the documents] get thrown away" and asked Risko to do his "best to make sure [the documents were] not around." Seidman Appendix ("Seidman App.") at 347-48. Risko also testified that Seidman told him to forget the documents ever existed. Seidman emphatically denies ever saying this. Both Risko and Seidman agree that Seidman told Risko he should tell OTS the truth.

Things grew tense. Risko left the room to speak with Poole. Seidman was left alone with the documents. Poole reentered the conference room, picked up the draft, crumpled it and left the room with it. Seidman followed Poole to his office where they had a heated exchange. Seidman grabbed the crumpled copy of the draft and tore it up. Seidman testified he did this "in a rage of anger" after learning Risko had made copies of all the relevant documents. Id. at 481-82. Risko testified he never informed Seidman that copies existed.*fn13

On October 30, 1991, OTS filed notice of charges against Seidman and Bailey.*fn14 On the same day, it issued a preliminary Order of Suspension removing Seidman from his posts at Crestmont without pay.*fn15 From April 20, 1992, through May 1, 1992, Treasury Department ALJ Walter Alprin ("Alprin") held hearings on the charges against Seidman and Bailey. On August 13, 1992, Alprin issued his decision recommending that the Director issue a Removal and Prohibition Order permanently barring Seidman from any work in the banking field and assessing $930,000 in civil penalties against him. Alprin also recommended an order directing Bailey to "cease and desist from engaging in any unsafe or unsound practices in conducting the business of any financial institution . . . ." Id. at 89. Alprin did not recommend any monetary penalty against Bailey.

G. The Director's Decision

Seidman and Bailey sought the Director's review of the ALJ's recommended decision and asked for oral argument. The Director denied the request for argument and issued a decision on December 4, 1992, finding against Seidman and issuing the Removal and Prohibition Order the ALJ had recommended. The Director determined, however, that the record was not sufficient to support the recommended civil penalty of $930,000 against Seidman and remanded the case to the ALJ to take further evidence concerning Seidman's ability to pay.*fn16 The Director also agreed with the ALJ's recommended findings of fact and Conclusions of law as to Bailey and entered a Permanent Cease and Desist Order, but he disagreed with the ALJ's Conclusion that no civil penalties were warranted against Bailey and sent Bailey's case back for further fact finding on money penalties.

In support of his order removing Seidman and banning him from banking, the Director found Seidman engaged in self-interested conduct by insinuating to UJB that a release from his FSA guarantee would cause Crestmont to provide end-user financing for FSA's Boonton project. The Director also found that Crestmont unlawfully made a loan commitment to Levine while Seidman was still a partner in FSA. Finding these acts of self-dealing were never disclosed to Crestmont's Board or the Senior Loan Committee, the Director held Seidman breached his fiduciary duties to Crestmont. The Director also held Seidman violated OTS's conflict of interest provision, 12 C.F.R. § 571.7(b), and sought to benefit personally from these acts through the release from his FSA guarantee.

The Director independently held that Seidman's attempt to destroy evidence and cover-up his activities during the investigation violated section 1818(e)(1). He found the attempted cover-up, which involved giving misleading testimony, destroying the original record of the fax of the early draft of Risko's letter from Seidman to Risko and requesting that Risko forget about the letter, inter alia, constituted an unsafe or unsound practice. The Director concluded that these acts established personal dishonesty within the meaning of section 1818(e)(1)(C)(i) and conferred a personal benefit on Seidman within the meaning of section 1818(e)(1)(B)(iii).

The Director also held Bailey had engaged in an unsafe and unsound banking practice. He found Bailey knew of Seidman's interest in FSA, failed to disclose it to the Board of Directors or the Senior Loan Committee and issued a commitment letter for the Levine loan before Seidman withdrew from FSA. The Director concluded this created an "abnormal risk of loss" to Crestmont and that a cease and desist order was appropriate under section 1818(b). Seidman App. at 121.

II. Jurisdiction

The Director had jurisdiction over these proceedings pursuant to 12 U.S.C.A. § 1818(h)(1). Seidman and Bailey filed timely petitions for review pursuant to 12 U.S.C.A. § 1818(h)(2). Because of the Director's remand to an ALJ for further findings on Seidman's and Bailey's ability to pay civil penalties, we must consider whether their petitions seek review of a final order. Generally, an order which decides all issues of liability but remands on issues of damages is not immediately appealable. See Teledyne Continental Motors v. United States, 906 F.2d 1579, 1582 (Fed. Cir. 1990). Here the agency clearly contemplates further action concerning civil penalties. So long as the assessment of monetary penalties is pending, the full impact the Director's decisions may have on either Seidman or Bailey is uncertain.

Under FDIA, parties sanctioned by OTS

may obtain a review of any order . . . by the filing in the court of appeals of the United States for the circuit in which the home office of the depository institution is located . . . within thirty days after the date of service of such order, a written petition praying that the order of the agency be modified, terminated, or set aside. . . . Upon the filing of such petition, such court shall have jurisdiction, which upon the filing of the record shall . . . be exclusive, to affirm, modify, terminate, or set aside, in whole or in part, the order of the agency. Review of such proceedings shall be had as provided in chapter 7 of Title 5. The judgment and decree of the court shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari . . . .

12 U.S.C.A. § 1818(h)(2) (West 1989). Nothing in FDIA expressly states that the "order" must be a final one. We recognized in Shea v. OTS, 934 F.2d 41 (3d Cir. 1991), however, "'there is a strong presumption that judicial review is only available when an agency action becomes final . . . .'" Id. at 44 (quoting Bell v. New Jersey, 461 U.S. 773, 778, 76 L. Ed. 2d 312, 103 S. Ct. 2187 (1983)). This presumption recognizes that postponement of review until final action can sometimes avoid the inefficiency of piecemeal review and, in some cases, make any review unnecessary. CEC Energy Co. v. Public Serv. Comm., 891 F.2d 1107, 1112 (3d Cir. 1989); see also Fidelity Television, Inc. v. Federal Communications Comm'n, 163 U.S. App. D.C. 441, 502 F.2d 443, 448 (D.C. Cir. 1974) (quoting Chicago & Southern Air Lines v. Waterman S.S. Corp., 333 U.S. 103, 113, 92 L. Ed. 568, 68 S. Ct. 431 (1948) and Isbrandtsen Co. v. United States, 93 U.S. App. D.C. 293, 211 F.2d 51, 55 & n.24 (D.C. Cir.), cert. denied, 347 U.S. 990 (1954)).

In Shea we concluded, "in this Circuit, the finality of a Disposition is determined by its consequences[,]" including "whether the OTS's decision 'imposes an obligation' or 'denies a right.'" Shea, 934 F.2d at 44-45. In CEC Energy we reasoned that "application of the ripeness doctrine prevents the entanglement of the courts in administrative policy disagreements and protects the agencies from judicial interference until decisions are formalized and their effects felt in a concrete way." CEC Energy Co., 891 F.2d at 1109 (citation omitted). We went on to state, "the doctrine of ripeness requires an evaluation of the fitness of the challenged issue for review and the hardship to the parties of withholding judicial consideration." Id. at 1109-10 (citation omitted); see also Federal Trade Comm'n. v. Standard Oil, Inc., 449 U.S. 232, 66 L. Ed. 2d 416, 101 S. Ct. 488 (1980); Solar Turbines Inc. v. Seif, 879 F.2d 1073, 1080 (3d Cir. 1989) (concluding Supreme Court's finality standard incorporates ripeness standard). An important but not dispositive factor is an agency's classification of its order as final. Because finality is a pragmatic requirement informed but not decided by an agency classification of its decision, we looked at several other factors in CEC Energy :

1) whether the decision represents the agency's definitive position on the question; 2) whether the decision has the status of law with the expectation of immediate compliance; 3) whether the decision has immediate impact on the day-to-day operations of the party seeking review; 4) whether the decision involves a pure question of law that does not require further factual development; and 5) whether immediate judicial review would speed enforcement of the relevant act.

CEC Energy Co., 891 F.2d at 1110 (citing Solar Turbines Inc., 879 F.2d at 1080). Thus, we turn to the facts that are material to our jurisdiction over Seidman's and Bailey's petitions for review.

Under the Director's order, Seidman is permanently removed from, and prohibited from returning to, the banking industry. The order denies Seidman a right to pursue the trade he has chosen. It also firmly concludes that Seidman is not fit to be a banker and that Bailey should be publicly reprimanded. The order notifies Seidman and Bailey of their right to petition for judicial review and the agency states it is final. Most significantly, the order demands immediate compliance and impacts immediately on Seidman's and Bailey's day-to-day affairs. OTS is currently enforcing the order precluding Seidman from taking part in the business of banking, and it is clear the agency has definitely decided to ban Seidman from that industry. Although the consequences to Bailey are not as harsh as those visited upon Seidman, the agency has indicated that it will engage in no further factual development or reconsideration of its order publicly directing Bailey to cease and desist from unsafe practices. The order has a continuing effect on Bailey's reputation and it too poses legal questions that can be fully reviewed at this time. In addition, Seidman's and Bailey's petitions pose questions that are mainly legal in nature and judicial review now is likely to facilitate the appropriate enforcement of applicable law.

Because assessment of any civil penalties hinges on the Director's Conclusion that Seidman and Bailey violated FIRREA, we believe review at this juncture serves the interest of judicial economy. This case turns not on the civil penalties that are yet to be determined on the Director's remand to an ALJ but on the legality of the decisions the Director has already made. The Director's decision "'imposes . . . obligations'" and "'denies. . . rights.'" Shea, 934 F.2d at 44-45. Therefore, we have jurisdiction under 12 U.S.C.A. ยง 1818(h)(2) to review the Director's order removing Seidman from ...

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