Chair of state banking committee settles suit over failed bank

July 6, 2012 Ailey - Federal and state officials enter Montgomery Bank & Trust in Ailey to close the bank on Friday, July 6, 2012. On July 6 2012, Montgomery Bank & Trust in Ailey was closed by the Georgia Department of Banking and Finance. The Federal Deposit Insurance Corporation (FDIC) was then named Receiver. HYOSUB SHIN / HSHIN@AJC.COM
July 6, 2012 Ailey - Federal and state officials enter Montgomery Bank & Trust in Ailey to close the bank on Friday, July 6, 2012. On July 6 2012, Montgomery Bank & Trust in Ailey was closed by the Georgia Department of Banking and Finance. The Federal Deposit Insurance Corporation (FDIC) was then named Receiver. HYOSUB SHIN / HSHIN@AJC.COM

The chairman of the state House committee on banking and his former partners have agreed to pay the FDIC nearly $1 million to settle a lawsuit over their failed South Georgia Bank.

Rep. Greg Morris, R-Vidalia, was among the directors of Montgomery Bank & Trust in Ailey. The bank was the victim of fraud by a former investment advisor, as well as the collapse of the housing market in 2008. Another director, Pete Robinson, a former chairman of the bank and a well-known lobbyist at the state Capitol, is among the defendants in the lawsuit.

The settlement, which does not include an admission of wrongdoing, was first reported by the website AllOnGeorgia.com. The lawsuit was first filed in 2015, following the bank's 2012 failure.

The Federal Deposit Insurance Corp. sued Morris and 10 other Montgomery Bank insiders and alleged gross negligence and breaches of fiduciary duty that allowed Aubrey Price to defraud the bank of $14.7 million.

Georgia had more banks fail than any other state following the financial collapse. In the aftermath of many, the FDIC sued former bank directors and officers alleging reckless conduct and seeking to collect against liability insurance policies or against bank officials directly.

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