Wed., January 19, 2011 7:52am (EST)

State Senator, Others Sued Over Bank Failure
By Associated Press
Updated: 3 years ago

ATLANTA  —  
State Sen. Jack Murphy and seven others are named in a lawsuit filed by the FDIC over a failed Alpharetta bank.
State Sen. Jack Murphy and seven others are named in a lawsuit filed by the FDIC over a failed Alpharetta bank.
Federal banking regulators are suing eight former officials from a failed Alpharetta bank, including a state senator just named head of the Senate Banking Committee.

The FDIC announced Tuesday that state Senator Jack S. Murphy, a Republican from Cumming, and other executives from Integrity Bank are accused of gross negligence and breaching fiduciary duty. The FDIC seeks more than $70 million in damages for a series of loans made from 2005 to 2007.

When reached by the Atlanta Journal-Constitution, Murphy told the paper he has no plans to step-down as banking committee chair.

The lawsuit is the third filed nationally and the first in Georgia by the FDIC since the banking crisis started. Georgia leads the nation in bank failures since mid-2008.

Integrity was the first of 52 banks to fail during that time andn two of its former officers have pleaded guilty to federal criminal charges.