Recent SEC Enforcement Of Regulation FD: Fifth Third Bancorp

On Nov. 22, 2011, the SEC announced a settlement with Fifth Third Bancorp (Fifth Third) over allegations that it selectively communicated to certain investors information regarding the redemption of its trust preferred securities. The settlement marked the first Regulation FD enforcement action brought by the SEC in over a year.

In May 2011, Fifth Third elected to redeem its trust preferred securities on the basis that a "capital treatment event" had occurred by virtue of certain provisions of the Dodd-Frank Act. To redeem the securities, Fifth Third was required first to obtain approval from the Federal Reserve Bank of Cleveland, and then to instruct the trustee to issue notice to the holders of the securities at least 30 days in advance of the redemption date. The governing trust documents required that the trustee give notice only to the Depository Trust Company (DTC), which was the sole registered holder of the securities.