1045-00007 · Client 1045 · Correspondence/SEC

letter-to-sec-extension-request.docx DOCUMENT Litigation

10 / 35 ← → ✕

Contract analysis Extract to table

PRIVILEGED & CONFIDENTIAL

CALDERWOOD & HARKNESS LLP 425 Lexington Avenue, 30th Floor New York, NY 10017

Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

Victoria Chambers Partner Direct Dial: (212) 558-4127 Direct Fax: (212) 558-3627 vchambers@calderwoodharkness.com

March 15, 2024

Via Email and Overnight Courier

Renata Moss, Branch Chief Division of Enforcement U.S. Securities and Exchange Commission 100 F Street NE Washington, D.C. 20549

Re: In the Matter of Belmont Ridge Bank National Association Investigation File No. HO-14287 Formal Order of Investigation No. EN-2023-0947 Request for Extension of Wells Submission Deadline

Dear Ms. Moss:

This firm represents Belmont Ridge Bank National Association ("BRB" or the "Bank") in connection with the above-referenced investigation, SEC Investigation File No. HO-14287, conducted pursuant to Formal Order of Investigation No. EN-2023-0947 (the "Investigation"). Our representation of BRB in this matter is reflected in Calderwood & Harkness LLP's Engagement/Matter No. SC-MAT-2023-4172. We write to respectfully request a brief extension of the deadline for BRB to file its Wells Submission in response to the Staff's Wells notification, for the reasons set forth below.

At the outset, we wish to acknowledge and express our appreciation for the professionalism exhibited by you and the other members of the Staff throughout the course of the Investigation. BRB has maintained, and intends to continue to maintain, a cooperative posture in all of its interactions with the Staff. The correspondence and communications between Calderwood & Harkness and the Staff over the preceding months have been constructive and conducted in good faith on all sides. We trust that the modest request set forth herein will be received in that same spirit.

I. The Wells Notification

On March 8, 2024, you and Assistant Director Gregory Bonham conducted a telephonic Wells notification call with the undersigned and our colleagues at Calderwood & Harkness. During that call, the Staff advised that it was considering recommending that the Commission institute an enforcement action against BRB for alleged violations of the federal securities laws. Specifically, the Staff identified the following statutory and regulatory provisions as the basis for its preliminary recommendation:

• Section 13(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78m(a), and Rule 13a-1 promulgated thereunder, 17 C.F.R. § 240.13a-1, relating to the filing of annual reports on Form 10-K that are alleged to contain materially inaccurate statements concerning BRB's allowance for credit losses;

• Section 13(b)(2)(A) of the Exchange Act, 15 U.S.C. § 78m(b)(2)(A), relating to the obligation to make and keep books, records, and accounts that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer; and

• Rule 12b-20 under the Exchange Act, 17 C.F.R. § 240.12b-20, relating to the obligation to include in periodic reports such further material information as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.

As communicated during the March 8, 2024 call, the Staff set a deadline of March 29, 2024 — twenty-one calendar days from the date of the Wells notification — for BRB to submit its written Wells Submission (the "Current Deadline").

II. Request for Extension

BRB respectfully requests that the Staff grant a one-week extension of the Current Deadline for filing its Wells Submission, from March 29, 2024 to April 5, 2024 (the "Proposed Deadline"). This represents a modest, one-time request for seven additional calendar days beyond the Current Deadline. BRB does not anticipate seeking any further extensions of time.

We recognize that the Wells process is designed to provide subjects of an investigation with a meaningful opportunity to present their position to the Staff before a recommendation is made to the Commission, and we take that opportunity seriously. It is precisely because BRB wishes to present the Staff with the most complete, thorough, and well-supported submission possible — one that will most effectively assist the Staff in its evaluation of the relevant facts and legal issues — that we seek this brief additional time.

III. Justification for the Requested Extension

The requested extension is warranted by several factors, each of which we describe in detail below.

A. Complexity of the Underlying Accounting Issues

The Investigation centers on BRB's allowance for credit losses ("ACL") as reported in its consolidated financial statements, and specifically on the Bank's application of the current expected credit loss methodology ("CECL") under Accounting Standards Codification Topic 326, Financial Instruments — Credit Losses ("ASC 326"), to the Bank's BridgeFin digital lending portfolio (the "BridgeFin Portfolio"). The BridgeFin Portfolio is a proprietary digital-origination consumer lending platform operated by BRB that, during the relevant period, maintained approximately $4.1 billion in outstanding consumer loan receivables across a range of unsecured personal loan, credit card, and point-of-sale installment loan products.

The central disputed issue in the Investigation involves the treatment of 12,847 individual loans within the BridgeFin Portfolio that were re-aged or modified pursuant to BRB's borrower assistance and loan modification programs during the period under examination. These loans carried an aggregate outstanding principal balance of approximately $236.4 million. The Staff's preliminary view, as communicated during the Wells notification, is that these re-aged and modified loans should have been reclassified within their original vintage delinquency buckets for purposes of historical loss-rate estimation under BRB's CECL vintage-cohort methodology, rather than treated as performing current loans within newly assigned vintage cohorts following the date of re-aging or modification.

The difference between BRB's reported ACL of approximately $143.5 million — representing an ACL coverage ratio of approximately 3.50% of the $4.1 billion in outstanding BridgeFin loans — and the Staff's preliminary calculation of an ACL of approximately $180.8 million — representing an ACL coverage ratio of approximately 4.41% — gives rise to a potential understatement of approximately $37.3 million. While BRB does not concede the accuracy or appropriateness of the Staff's preliminary calculation, the Bank acknowledges that the resolution of this question involves highly nuanced and technically complex issues at the intersection of CECL methodology, vintage-cohort modeling, the calibration and interplay of quantitative and qualitative loss factors, and the exercise of reasonable management judgment in the development of accounting estimates.

ASC 326 affords reporting entities significant latitude in selecting and applying CECL methodologies, and the accounting literature recognizes that reasonable professionals may arrive at differing estimates of expected credit losses when applying the same standard to the same portfolio. The Wells Submission must therefore present a detailed, technically rigorous analysis demonstrating that BRB's ACL fell within the range of reasonable accounting estimates under ASC 326, and that the Bank's treatment of re-aged and modified loans was consistent with both the text of the standard and prevailing industry practice. The preparation of such an analysis requires substantial time and care.

Moreover, the potential understatement of $37.3 million must be contextualized within the broader framework of the Bank's financial statements, taking into account the materiality thresholds applicable to BRB as a reporting issuer, the inherent imprecision of credit loss estimation models, the reasonableness of the qualitative overlay adjustments that BRB applied to its quantitative loss-rate estimates, and the adequacy of the Bank's disclosures concerning the assumptions and uncertainties underlying its ACL. Each of these issues requires careful treatment in the Wells Submission.

B. Need to Finalize Forensic Accounting Expert Report

In connection with the preparation of the Wells Submission, Calderwood & Harkness has retained Brindoval Analytic Partners LLC ("Brindoval"), a nationally recognized forensic accounting and financial advisory consultancy, to prepare an independent expert analysis of BRB's CECL methodology and the BridgeFin Portfolio loss-rate modeling at issue in the Investigation. The Brindoval engagement is being directed by Dr. Franklin Osei, CPA, CFF, a certified public accountant and certified in financial forensics who has more than twenty-five years of experience in forensic accounting, credit loss estimation, and regulatory investigations involving financial institutions.

Brindoval's analysis encompasses several distinct work streams that are central to the issues raised by the Staff's preliminary recommendation:

First, Brindoval has undertaken a detailed reconstruction of BRB's vintage-cohort approach to estimating expected credit losses on the BridgeFin Portfolio, including the segmentation of the loan portfolio into vintage pools, the derivation of historical loss rates for each vintage, the application of loss-rate adjustments for reasonable and supportable economic forecasts, and the reversion to longer-term historical experience beyond the reasonable and supportable forecast period.

Second, Brindoval has analyzed BRB's treatment of the 12,847 re-aged and modified loans against applicable regulatory guidance, including the Office of the Comptroller of the Currency's Comptroller's Handbook on the Allowance for Credit Losses and related OCC guidance on loan modifications and troubled debt restructurings, as well as relevant interagency examination guidance.

Third, Brindoval has conducted a peer-bank benchmarking study comparing BRB's ACL coverage ratio, net charge-off rates, delinquency disclosures, and CECL methodology disclosures with those of similarly situated financial institutions that maintain significant digital-lending or fintech-partnership portfolios. This peer comparison is designed to demonstrate that BRB's ACL and its underlying methodological choices were consistent with, and in several respects more conservative than, the practices adopted by comparable institutions.

The Brindoval report is substantially complete as of the date of this letter. However, the finalization of the peer-bank comparison data set — which requires the collection, normalization, and analysis of publicly available financial data from a carefully selected group of peer institutions across multiple reporting periods — is still in progress. Additionally, Dr. Osei's final review and sign-off on the completed report has not yet occurred and is expected to require several additional business days. We anticipate that the Brindoval report will be finalized no later than April 2, 2024, which would provide sufficient time for its incorporation into the Wells Submission as a critical exhibit prior to the Proposed Deadline.

The Brindoval expert report will directly and substantively address the Staff's preliminary views regarding the adequacy of BRB's ACL and the appropriateness of the Bank's treatment of re-aged and modified loans. We believe this report will be of significant value to the Staff's evaluation of this matter, and we respectfully submit that it would not serve the interests of a fair and well-informed Staff recommendation to file the Wells Submission without the completed expert analysis.

C. Scope of the Document Production and Testimony Record

The Investigation has been extensive in scope. Over the course of six rolling document productions between November 1, 2023 and March 1, 2024, BRB produced a total of 284,617 documents comprising approximately 1.42 million pages of material responsive to the Staff's document requests and subpoenas. These productions encompassed, among other categories, internal BRB memoranda, board and committee minutes, credit loss modeling files, loan-level data, internal audit reports, correspondence with the Bank's independent auditors, and regulatory examination materials.

In addition, three BRB witnesses provided investigative testimony under oath before the Staff:

• Patricia Navarrete, Chief Financial Officer of BRB, who testified on January 18, 2024;

• Naveen Chakravarti, Senior Vice President and Division Head of BridgeFin, who testified on January 30, 2024; and

• Raymond Hu, Chief Accounting Officer of BRB, who testified on February 14, 2024.

The Wells Submission must comprehensively and accurately address the testimony provided by each of these witnesses, as well as the extensive documentary record, in support of BRB's position that no enforcement action is warranted. Preparing a submission that meaningfully engages with a record of this magnitude — and that faithfully represents the facts established by the testimony and documents — is an undertaking that requires careful attention and, in the circumstances presented here, the additional time we have requested. We note in particular that Mr. Hu's testimony on February 14, 2024 addressed the most technically granular aspects of BRB's CECL methodology and the re-aging treatment, and that portions of his testimony must be carefully integrated with the Brindoval expert analysis to present a coherent and persuasive narrative for the Staff's consideration.

D. Additional Considerations

Two additional practical considerations support the requested extension.

First, BRB's Audit Committee, which is chaired by independent director Gwendolyn Prescott, convened an emergency session on March 15, 2024 — the date of this letter — to review the Wells notification and to authorize BRB's response strategy. The Audit Committee is exercising its oversight responsibilities with respect to the Investigation and has directed that the final Wells Submission reflect the Audit Committee's input, guidance, and formal authorization before it is filed with the Staff. Given that the Audit Committee session occurred today, the committee members and their independent advisors require adequate time to review the draft submission, provide their comments, and authorize the final filing. This process cannot be completed in a manner consistent with the Current Deadline.

Second, BRB's General Counsel, Derek Sung, is coordinating a comprehensive internal review of the draft Wells Submission with BRB's senior management team, including the Bank's Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, and Chief Accounting Officer. This internal review process is essential to ensure the accuracy and completeness of the factual representations contained in the submission and to confirm that the positions articulated therein are fully consistent with the Bank's records and the understanding of the individuals with the most direct knowledge of the relevant facts. Mr. Sung has confirmed that this internal review process is actively underway and will be completed well within the timeframe afforded by the Proposed Deadline.

IV. Assurance of Continued Cooperation

We wish to reiterate, in the strongest terms, that BRB remains fully committed to its cooperative posture throughout the Investigation. BRB has cooperated extensively with the Staff's inquiry from its inception, as evidenced by the Bank's timely and voluminous document productions, the voluntary provision of three witnesses for investigative testimony, and the constructive dialogue that Calderwood & Harkness has maintained with the Staff throughout this process. The extension request set forth in this letter is made in good faith and solely for the purpose of ensuring that the Wells Submission is as complete, accurate, and useful to the Staff as possible. We believe that the additional time requested will ultimately serve the interests of both BRB and the Staff by producing a more thorough and well-supported submission for the Staff's consideration.

BRB does not anticipate seeking any further extensions of the Wells Submission deadline beyond the Proposed Deadline of April 5, 2024.

V. Proposed New Deadline and Request for Confirmation

To summarize, BRB respectfully requests that the Staff extend the deadline for filing BRB's Wells Submission from March 29, 2024 to April 5, 2024. We respectfully request the Staff's confirmation of this extension at the earliest convenience.

Should you have any questions regarding this request, or should you wish to discuss the matter further, please do not hesitate to contact me directly at (212) 558-4127 or by email at vchambers@calderwoodharkness.com. I am available at your convenience and would welcome the opportunity to discuss any aspect of this request by telephone.

We thank you for your consideration of this matter and for your continued professionalism throughout the Investigation.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Victoria Chambers Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, NY 10017 Telephone: (212) 558-4127 Facsimile: (212) 558-3627

Email: vchambers@calderwoodharkness.com

cc (via email):

Gregory Bonham, Assistant Director, Financial Fraud Unit, Division of Enforcement, U.S. Securities and Exchange Commission

Andrea Felton, Senior Staff Attorney, Division of Enforcement, U.S. Securities and Exchange Commission

Christopher Yuen, Staff Attorney, Division of Enforcement, U.S. Securities and Exchange Commission

Derek Sung, General Counsel, Belmont Ridge Bank National Association (via separate cover)

PRIVILEGED & CONFIDENTIAL
CALDERWOOD & HARKNESS LLP 425 Lexington Avenue, 30th Floor New York, NY 10017
Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
Victoria Chambers Partner Direct Dial: (212) 558-4127 Direct Fax: (212) 558-3627 vchambers@calderwoodharkness.com
March 15, 2024
Via Email and Overnight Courier
Renata Moss, Branch Chief Division of Enforcement U.S. Securities and Exchange Commission 100 F Street NE Washington, D.C. 20549
Re: In the Matter of Belmont Ridge Bank National Association Investigation File No. HO-14287 Formal Order of Investigation No. EN-2023-0947 Request for Extension of Wells Submission Deadline
Dear Ms. Moss:
This firm represents Belmont Ridge Bank National Association ("BRB" or the "Bank") in connection with the above-referenced investigation, SEC Investigation File No. HO-14287, conducted pursuant to Formal Order of Investigation No. EN-2023-0947 (the "Investigation"). Our representation of BRB in this matter is reflected in Calderwood & Harkness LLP's Engagement/Matter No. SC-MAT-2023-4172. We write to respectfully request a brief extension of the deadline for BRB to file its Wells Submission in response to the Staff's Wells notification, for the reasons set forth below.
At the outset, we wish to acknowledge and express our appreciation for the professionalism exhibited by you and the other members of the Staff throughout the course of the Investigation. BRB has maintained, and intends to continue to maintain, a cooperative posture in all of its interactions with the Staff. The correspondence and communications between Calderwood & Harkness and the Staff over the preceding months have been constructive and conducted in good faith on all sides. We trust that the modest request set forth herein will be received in that same spirit.
I. The Wells Notification
On March 8, 2024, you and Assistant Director Gregory Bonham conducted a telephonic Wells notification call with the undersigned and our colleagues at Calderwood & Harkness. During that call, the Staff advised that it was considering recommending that the Commission institute an enforcement action against BRB for alleged violations of the federal securities laws. Specifically, the Staff identified the following statutory and regulatory provisions as the basis for its preliminary recommendation:
• Section 13(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78m(a), and Rule 13a-1 promulgated thereunder, 17 C.F.R. § 240.13a-1, relating to the filing of annual reports on Form 10-K that are alleged to contain materially inaccurate statements concerning BRB's allowance for credit losses;
• Section 13(b)(2)(A) of the Exchange Act, 15 U.S.C. § 78m(b)(2)(A), relating to the obligation to make and keep books, records, and accounts that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer; and
• Rule 12b-20 under the Exchange Act, 17 C.F.R. § 240.12b-20, relating to the obligation to include in periodic reports such further material information as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.
As communicated during the March 8, 2024 call, the Staff set a deadline of March 29, 2024 — twenty-one calendar days from the date of the Wells notification — for BRB to submit its written Wells Submission (the "Current Deadline").
II. Request for Extension
BRB respectfully requests that the Staff grant a one-week extension of the Current Deadline for filing its Wells Submission, from March 29, 2024 to April 5, 2024 (the "Proposed Deadline"). This represents a modest, one-time request for seven additional calendar days beyond the Current Deadline. BRB does not anticipate seeking any further extensions of time.
We recognize that the Wells process is designed to provide subjects of an investigation with a meaningful opportunity to present their position to the Staff before a recommendation is made to the Commission, and we take that opportunity seriously. It is precisely because BRB wishes to present the Staff with the most complete, thorough, and well-supported submission possible — one that will most effectively assist the Staff in its evaluation of the relevant facts and legal issues — that we seek this brief additional time.
III. Justification for the Requested Extension
The requested extension is warranted by several factors, each of which we describe in detail below.
A. Complexity of the Underlying Accounting Issues
The Investigation centers on BRB's allowance for credit losses ("ACL") as reported in its consolidated financial statements, and specifically on the Bank's application of the current expected credit loss methodology ("CECL") under Accounting Standards Codification Topic 326, Financial Instruments — Credit Losses ("ASC 326"), to the Bank's BridgeFin digital lending portfolio (the "BridgeFin Portfolio"). The BridgeFin Portfolio is a proprietary digital-origination consumer lending platform operated by BRB that, during the relevant period, maintained approximately $4.1 billion in outstanding consumer loan receivables across a range of unsecured personal loan, credit card, and point-of-sale installment loan products.
The central disputed issue in the Investigation involves the treatment of 12,847 individual loans within the BridgeFin Portfolio that were re-aged or modified pursuant to BRB's borrower assistance and loan modification programs during the period under examination. These loans carried an aggregate outstanding principal balance of approximately $236.4 million. The Staff's preliminary view, as communicated during the Wells notification, is that these re-aged and modified loans should have been reclassified within their original vintage delinquency buckets for purposes of historical loss-rate estimation under BRB's CECL vintage-cohort methodology, rather than treated as performing current loans within newly assigned vintage cohorts following the date of re-aging or modification.
The difference between BRB's reported ACL of approximately $143.5 million — representing an ACL coverage ratio of approximately 3.50% of the $4.1 billion in outstanding BridgeFin loans — and the Staff's preliminary calculation of an ACL of approximately $180.8 million — representing an ACL coverage ratio of approximately 4.41% — gives rise to a potential understatement of approximately $37.3 million. While BRB does not concede the accuracy or appropriateness of the Staff's preliminary calculation, the Bank acknowledges that the resolution of this question involves highly nuanced and technically complex issues at the intersection of CECL methodology, vintage-cohort modeling, the calibration and interplay of quantitative and qualitative loss factors, and the exercise of reasonable management judgment in the development of accounting estimates.
ASC 326 affords reporting entities significant latitude in selecting and applying CECL methodologies, and the accounting literature recognizes that reasonable professionals may arrive at differing estimates of expected credit losses when applying the same standard to the same portfolio. The Wells Submission must therefore present a detailed, technically rigorous analysis demonstrating that BRB's ACL fell within the range of reasonable accounting estimates under ASC 326, and that the Bank's treatment of re-aged and modified loans was consistent with both the text of the standard and prevailing industry practice. The preparation of such an analysis requires substantial time and care.
Moreover, the potential understatement of $37.3 million must be contextualized within the broader framework of the Bank's financial statements, taking into account the materiality thresholds applicable to BRB as a reporting issuer, the inherent imprecision of credit loss estimation models, the reasonableness of the qualitative overlay adjustments that BRB applied to its quantitative loss-rate estimates, and the adequacy of the Bank's disclosures concerning the assumptions and uncertainties underlying its ACL. Each of these issues requires careful treatment in the Wells Submission.
B. Need to Finalize Forensic Accounting Expert Report
In connection with the preparation of the Wells Submission, Calderwood & Harkness has retained Brindoval Analytic Partners LLC ("Brindoval"), a nationally recognized forensic accounting and financial advisory consultancy, to prepare an independent expert analysis of BRB's CECL methodology and the BridgeFin Portfolio loss-rate modeling at issue in the Investigation. The Brindoval engagement is being directed by Dr. Franklin Osei, CPA, CFF, a certified public accountant and certified in financial forensics who has more than twenty-five years of experience in forensic accounting, credit loss estimation, and regulatory investigations involving financial institutions.
Brindoval's analysis encompasses several distinct work streams that are central to the issues raised by the Staff's preliminary recommendation:
First, Brindoval has undertaken a detailed reconstruction of BRB's vintage-cohort approach to estimating expected credit losses on the BridgeFin Portfolio, including the segmentation of the loan portfolio into vintage pools, the derivation of historical loss rates for each vintage, the application of loss-rate adjustments for reasonable and supportable economic forecasts, and the reversion to longer-term historical experience beyond the reasonable and supportable forecast period.
Second, Brindoval has analyzed BRB's treatment of the 12,847 re-aged and modified loans against applicable regulatory guidance, including the Office of the Comptroller of the Currency's Comptroller's Handbook on the Allowance for Credit Losses and related OCC guidance on loan modifications and troubled debt restructurings, as well as relevant interagency examination guidance.
Third, Brindoval has conducted a peer-bank benchmarking study comparing BRB's ACL coverage ratio, net charge-off rates, delinquency disclosures, and CECL methodology disclosures with those of similarly situated financial institutions that maintain significant digital-lending or fintech-partnership portfolios. This peer comparison is designed to demonstrate that BRB's ACL and its underlying methodological choices were consistent with, and in several respects more conservative than, the practices adopted by comparable institutions.
The Brindoval report is substantially complete as of the date of this letter. However, the finalization of the peer-bank comparison data set — which requires the collection, normalization, and analysis of publicly available financial data from a carefully selected group of peer institutions across multiple reporting periods — is still in progress. Additionally, Dr. Osei's final review and sign-off on the completed report has not yet occurred and is expected to require several additional business days. We anticipate that the Brindoval report will be finalized no later than April 2, 2024, which would provide sufficient time for its incorporation into the Wells Submission as a critical exhibit prior to the Proposed Deadline.
The Brindoval expert report will directly and substantively address the Staff's preliminary views regarding the adequacy of BRB's ACL and the appropriateness of the Bank's treatment of re-aged and modified loans. We believe this report will be of significant value to the Staff's evaluation of this matter, and we respectfully submit that it would not serve the interests of a fair and well-informed Staff recommendation to file the Wells Submission without the completed expert analysis.
C. Scope of the Document Production and Testimony Record
The Investigation has been extensive in scope. Over the course of six rolling document productions between November 1, 2023 and March 1, 2024, BRB produced a total of 284,617 documents comprising approximately 1.42 million pages of material responsive to the Staff's document requests and subpoenas. These productions encompassed, among other categories, internal BRB memoranda, board and committee minutes, credit loss modeling files, loan-level data, internal audit reports, correspondence with the Bank's independent auditors, and regulatory examination materials.
In addition, three BRB witnesses provided investigative testimony under oath before the Staff:
• Patricia Navarrete, Chief Financial Officer of BRB, who testified on January 18, 2024;
• Naveen Chakravarti, Senior Vice President and Division Head of BridgeFin, who testified on January 30, 2024; and
• Raymond Hu, Chief Accounting Officer of BRB, who testified on February 14, 2024.
The Wells Submission must comprehensively and accurately address the testimony provided by each of these witnesses, as well as the extensive documentary record, in support of BRB's position that no enforcement action is warranted. Preparing a submission that meaningfully engages with a record of this magnitude — and that faithfully represents the facts established by the testimony and documents — is an undertaking that requires careful attention and, in the circumstances presented here, the additional time we have requested. We note in particular that Mr. Hu's testimony on February 14, 2024 addressed the most technically granular aspects of BRB's CECL methodology and the re-aging treatment, and that portions of his testimony must be carefully integrated with the Brindoval expert analysis to present a coherent and persuasive narrative for the Staff's consideration.
D. Additional Considerations
Two additional practical considerations support the requested extension.
First, BRB's Audit Committee, which is chaired by independent director Gwendolyn Prescott, convened an emergency session on March 15, 2024 — the date of this letter — to review the Wells notification and to authorize BRB's response strategy. The Audit Committee is exercising its oversight responsibilities with respect to the Investigation and has directed that the final Wells Submission reflect the Audit Committee's input, guidance, and formal authorization before it is filed with the Staff. Given that the Audit Committee session occurred today, the committee members and their independent advisors require adequate time to review the draft submission, provide their comments, and authorize the final filing. This process cannot be completed in a manner consistent with the Current Deadline.
Second, BRB's General Counsel, Derek Sung, is coordinating a comprehensive internal review of the draft Wells Submission with BRB's senior management team, including the Bank's Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, and Chief Accounting Officer. This internal review process is essential to ensure the accuracy and completeness of the factual representations contained in the submission and to confirm that the positions articulated therein are fully consistent with the Bank's records and the understanding of the individuals with the most direct knowledge of the relevant facts. Mr. Sung has confirmed that this internal review process is actively underway and will be completed well within the timeframe afforded by the Proposed Deadline.
IV. Assurance of Continued Cooperation
We wish to reiterate, in the strongest terms, that BRB remains fully committed to its cooperative posture throughout the Investigation. BRB has cooperated extensively with the Staff's inquiry from its inception, as evidenced by the Bank's timely and voluminous document productions, the voluntary provision of three witnesses for investigative testimony, and the constructive dialogue that Calderwood & Harkness has maintained with the Staff throughout this process. The extension request set forth in this letter is made in good faith and solely for the purpose of ensuring that the Wells Submission is as complete, accurate, and useful to the Staff as possible. We believe that the additional time requested will ultimately serve the interests of both BRB and the Staff by producing a more thorough and well-supported submission for the Staff's consideration.
BRB does not anticipate seeking any further extensions of the Wells Submission deadline beyond the Proposed Deadline of April 5, 2024.
V. Proposed New Deadline and Request for Confirmation
To summarize, BRB respectfully requests that the Staff extend the deadline for filing BRB's Wells Submission from March 29, 2024 to April 5, 2024. We respectfully request the Staff's confirmation of this extension at the earliest convenience.
Should you have any questions regarding this request, or should you wish to discuss the matter further, please do not hesitate to contact me directly at (212) 558-4127 or by email at vchambers@calderwoodharkness.com. I am available at your convenience and would welcome the opportunity to discuss any aspect of this request by telephone.
We thank you for your consideration of this matter and for your continued professionalism throughout the Investigation.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Victoria Chambers Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, NY 10017 Telephone: (212) 558-4127 Facsimile: (212) 558-3627
Email: vchambers@calderwoodharkness.com
cc (via email):
Gregory Bonham, Assistant Director, Financial Fraud Unit, Division of Enforcement, U.S. Securities and Exchange Commission
Andrea Felton, Senior Staff Attorney, Division of Enforcement, U.S. Securities and Exchange Commission
Christopher Yuen, Staff Attorney, Division of Enforcement, U.S. Securities and Exchange Commission
Derek Sung, General Counsel, Belmont Ridge Bank National Association (via separate cover)

PRIVILEGED & CONFIDENTIAL

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts