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  • Writer's pictureThe San Juan Daily Star

OCIF orders liquidation of Nodus International Bank

Commissioner of Financial Institutions Natalia Zequeira Díaz

By The Star Staff

The Office of the Commissioner of Financial Institutions (OCIF by its Spanish acronym) on Tuesday issued an order to appoint a receiver and revoke the operating license of Nodus International Bank Inc. (Nodus).

The decision sought to protect Puerto Rico’s financial system and international banking center against irreparable harm, OCIF Commissioner Natalia Zequeira Díaz said in a prepared statement.

The OCIF said “it will not allow or tolerate financial entities holding licenses issued by the government to operate outside the law or ignore the clear mandates of the applicable statutes and regulations.”

Nodus is an international banking entity (EBI) organized with a license issued by the OCIF to operate under Law 52 of Aug. 11, 1989.

OCIF’s complaint and order appoint an independent liquidator to take possession and control of the assets and liabilities of Nodus to complete its liquidation and dissolution in an orderly manner, complying with the intent and letter of the current liquidation plan. To this end, among other things, the complaint and order has the effect of revoking Nodus’ EBI license and provides for Nodus to continue under the jurisdiction of OCIF as an EBI until OCIF is sufficiently sure that all matters necessary to culminate with the liquidation plan are completed.

According to the complaint and order, it constitutes a summary emergency action that seeks to:

* Address an imminent danger to the security of the industry of international banking entities operating from Puerto Rico’s jurisdiction.

* Protect the public interest by guaranteeing full and strict compliance with all laws and regulations applicable to the licenses issued by the OCIF and the agreements reached by the OCIF with its regulated entities.

* Avoid causing or potentially causing irreparable damage to the interests of Nodus and the people and entities with funds or securities in the institution, as well as to the creditors of that entity.

Through the liquidation plan, Nodus agreed to cease operations and continue operating under its license for the sole and exclusive purpose of liquidating its assets for the benefit of its depositors. However, according to the complaint and order, Nodus has paid directors and shareholders remunerations inconsistent with the liquidation plan and has carried out transactions not authorized by the administrator with related persons representing conflicting interests that have placed Nodus in a dangerous position.

For all of those reasons, the complaint and order immediately appoints the administrator of the liquidation plan, the firm Driven Advisors PSC, to serve as trustee so that an independent third party takes control of the liquidation process.

According to the complaint and order, the receiver shall, among other things:

* Take possession of the assets and liabilities, books, records, documents, and files of Nodus, including assets and funds that are currently located abroad.

* Collect all loans, charges and fees owed to Nodus.

* Pay the obligations and debts of Nodus, after having made payment of the necessary expenses of the receivership.

* Supervise the dissolution and liquidation of the international banking entity.

Following the due process of law in these cases, the complaint and order grants Nodus until Oct. 13 to respond in writing and summons the banking entity to a hearing at the OCIF on Oct. 17.

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