Fed bans former Golden Pacific investor

An investor who tried to buy Golden Pacific Bancorp in Sacramento, Calif., has been banned from the banking industry. 

The Federal Reserve said it banned Karl Klessig for providing a fraudulent loan document and forged signature when he applied to buy the bank two years ago. 

“Klessig’s deceptive conduct in connection with his effort to acquire control of the bank exposed the institution to probable financial loss or could have prejudiced the interests of the bank’s depositors,” the Fed said in a Friday press release.

Klessig, chairman of a mortgage title company, “falsely represented that he had obtained a loan to finance his purchase of a controlling interest in Golden Pacific,” the Fed said. He withdrew his application after the fraud was discovered, the Fed said. 

Klessig agreed to the order without denying or admitting wrongdoing. 

Golden Pacific was eventually sold to SoFi.