1045-00007 · Client 1045 · Correspondence/SEC

letter-to-sec-initial-response.docx DOCUMENT Litigation

11 / 35 ← → ✕

CALDERWOOD & HARKNESS LLP Attorneys at Law

425 Lexington Avenue, 30th Floor New York, New York 10017

Telephone: (212) 634-7800 Facsimile: (212) 634-7801

September 29, 2023

VIA ELECTRONIC MAIL AND OVERNIGHT COURIER

Andrea Felton, Senior Staff Attorney 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 File No. HO-14287

Dear Ms. Felton:

I. Entry of Appearance and Identification of Client

Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H") has been retained by Belmont Ridge Bank National Association ("BRB" or the "Bank") in connection with the above-referenced matter. By this letter, Calderwood & Harkness enters its appearance as counsel to BRB in connection with the investigation referenced in the Staff's voluntary request letter dated September 18, 2023.

Victoria Chambers, Partner, is the responsible partner and primary point of contact for this engagement. All future communications, document requests, subpoenas, correspondence, and other inquiries regarding this matter should be directed to:

Victoria Chambers, Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct Telephone: (212) 634-7823

Email: vchambers@calderwoodharkness.com

In addition, Jasmine Thornton, Lead Associate, will serve as the day-to-day contact for the engagement and is authorized to communicate with the Staff on BRB's behalf regarding scheduling, production logistics, and other matters arising in the ordinary course of the inquiry. Ms. Thornton's contact information is as follows:

Jasmine Thornton, Associate Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct Telephone: (212) 634-7841

Email: jthornton@calderwoodharkness.com

By way of background, BRB is a national banking association organized under the laws of the United States and operating pursuant to OCC Charter No. 24891. The Bank is headquartered at 200 Park Avenue South, 38th Floor, New York, New York 10003. BRB's common stock is listed on the Nasdaq Stock Market under the ticker symbol "BRDG." The Bank is a reporting company subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended.

We note for the Staff's records that BRB was previously represented by Caldwell Pratt & Stein LLP in connection with securities reporting matters and related regulatory correspondence. Martin Caldwell of that firm initially received the Staff's voluntary request letter dated September 18, 2023, and promptly notified BRB of its receipt. Subsequently, BRB retained Calderwood & Harkness specifically for purposes of responding to the Staff's inquiry in this matter. Any prior communications between the Staff and Caldwell Pratt & Stein LLP regarding BRB's securities filings were in the context of that firm's prior engagement and do not reflect the scope of Calderwood & Harkness's current representation. We understand that Mr. Caldwell has separately communicated to the Staff his firm's withdrawal as counsel of record in connection with this matter.

We wish to confirm that Calderwood & Harkness's engagement encompasses the representation of BRB, the entity, in connection with the Staff's investigation. Calderwood & Harkness does not represent any individual officer, director, or employee of BRB in their personal capacity in connection with this matter. Should any individual associated with BRB require separate counsel, we will advise such individual to retain independent representation.

II. Acknowledgment of Receipt of the Voluntary Request Letter

BRB confirms that it received the Staff's voluntary request letter dated September 18, 2023 (the "Voluntary Request Letter"). We acknowledge receipt of this letter and have carefully reviewed its contents with our client.

BRB understands that the Voluntary Request Letter relates to the Bank's public filings with the Commission, specifically the following:

(a) BRB's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (filed with the Commission on February 28, 2023);

(b) BRB's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 (filed with the Commission on May 10, 2023); and

(c) BRB's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 (filed with the Commission on August 9, 2023).

BRB further acknowledges that the Staff's inquiry concerns, among other matters, the adequacy of the Bank's disclosures relating to its allowance for credit losses ("ACL"), particularly as applied to the Bank's BridgeFin digital lending portfolio. BRB understands that the Staff's inquiry may also encompass related matters, including the Bank's implementation of the Current Expected Credit Losses ("CECL") methodology under Accounting Standards Codification Topic 326, Financial Instruments — Credit Losses ("ASC 326"), as it pertains to the BridgeFin portfolio, and the extent to which the Bank's disclosures provided investors with material information regarding the credit risk characteristics, loss estimation methodologies, and performance trends associated with that portfolio.

BRB understands the seriousness of this inquiry and the importance of providing the Staff with complete, accurate, and timely information. The Bank is committed to engaging with the Staff in a forthright and transparent manner throughout the course of this investigation.

III. Confirmation of BRB's Cooperation Posture

BRB wishes to affirmatively state, at the outset, that the Bank intends to cooperate fully with the Staff's inquiry. BRB is committed to transparency and to working constructively with the Division of Enforcement to address the Staff's questions and concerns. The Bank recognizes that meaningful cooperation, as set forth in the Commission's framework for evaluating cooperation by individuals and companies in enforcement proceedings, requires timely and substantive engagement, and BRB is prepared to meet that standard.

To that end, BRB has already taken several initial steps to identify, preserve, and collect documents and information responsive to the categories identified in the Voluntary Request Letter. Among other actions:

• Upon receipt of the Voluntary Request Letter, BRB promptly instituted a comprehensive litigation hold directing relevant custodians to preserve all potentially relevant documents, communications, and electronically stored information ("ESI"). The litigation hold was issued to, among others, senior management of the Bank, personnel within the BridgeFin division, the accounting and finance departments, risk management personnel, internal audit staff, and legal department staff. The litigation hold memorandum was distributed on September 20, 2023, within two business days of the Bank's receipt of the Voluntary Request Letter, and directed custodians to suspend any routine document destruction or deletion protocols as they may apply to materials within the scope of the inquiry.

• BRB has engaged its information technology and records management teams to identify the relevant repositories, systems, and data sources that may contain responsive materials, including the Bank's email systems, shared network drives, document management platforms, the BridgeFin loan origination and servicing platform, and the Bank's financial reporting and accounting systems.

• BRB has commenced an internal review to identify and organize materials responsive to the specific document categories set forth in the Voluntary Request Letter, subject to the meet-and-confer process described below regarding the scope and parameters of the Bank's collection and production efforts.

BRB is prepared to engage in a cooperative dialogue with the Staff to facilitate an efficient and thorough review and to minimize any unnecessary burden on either party. The Bank believes that a collaborative approach will serve the mutual interests of BRB and the Staff in reaching a resolution of the inquiry in a timely and orderly fashion.

IV. Request for Meet-and-Confer Regarding Scope and Timing

BRB respectfully requests an opportunity to meet and confer with the Staff at the Staff's earliest convenience to discuss the scope and timing of BRB's response to the Voluntary Request Letter. We believe that an early dialogue will help ensure that BRB's collection, review, and production efforts are appropriately targeted and responsive to the Staff's areas of interest, while also allowing the parties to establish mutually agreeable protocols for document production and information exchange.

Specifically, BRB proposes that the meet-and-confer address the following topics:

Scope of Document Categories. BRB seeks clarification of the categories of documents and information sought by the Staff to ensure that the Bank's collection efforts are appropriately targeted and responsive. In particular, certain categories identified in the Voluntary Request Letter — including, for example, the request for "all documents and communications relating to the development, calibration, and validation of credit loss models" — are potentially broad in scope, and we believe that a discussion with the Staff regarding the specific areas of focus within those categories would enable BRB to prioritize its efforts and provide the Staff with the most relevant materials in an efficient manner.

Relevant Time Period. BRB seeks confirmation of the relevant time period for responsive materials. Based on the Staff's references to the Form 10-K for fiscal year ended December 31, 2022, and the Forms 10-Q for Q1 and Q2 2023, BRB's preliminary understanding is that the inquiry focuses on the FY 2022 and Q1–Q2 2023 reporting periods. However, BRB recognizes that documents and communications from earlier periods may provide relevant context regarding the development and evolution of the Bank's ACL methodology as applied to the BridgeFin portfolio, and we seek the Staff's guidance as to the appropriate temporal scope.

Custodian Identification. BRB proposes to discuss with the Staff the appropriate custodians whose files should be searched in connection with the document collection. BRB is willing to propose an initial custodian list for the Staff's review and comment, and we anticipate that a collaborative discussion regarding custodian selection will help ensure that the relevant materials are identified without unnecessary duplication or burden. We expect that the initial custodian list will include individuals within BRB's accounting, finance, risk management, BridgeFin division, internal audit, and legal functions, but we welcome the Staff's input regarding any additional custodians the Staff believes are relevant.

Document Format and Production Protocols. BRB seeks to agree with the Staff on the format for any document production and related production protocols. BRB proposes producing documents in TIFF image format with extracted text and associated metadata, in accordance with the Staff's standard production specifications. BRB further seeks agreement on Bates-number stamping conventions (BRB proposes using the prefix "BRB-ENF-" followed by sequential numbering), search methodologies including keyword search terms and date ranges, and any applicable deduplication protocols. In addition, BRB wishes to discuss with the Staff appropriate confidentiality protections for proprietary business information that may be responsive to the Staff's requests, including, without limitation, information relating to BRB's AI-driven underwriting models, proprietary algorithms, and trade secrets that are integral to the Bank's BridgeFin digital lending platform. BRB anticipates requesting that any such materials be accorded confidential treatment under 17 C.F.R. § 200.83, and we welcome the opportunity to discuss the appropriate procedures for making and processing such a request.

Timeline for Production. BRB seeks to discuss with the Staff a reasonable timeline for the Bank to identify, collect, review, and produce responsive documents and information. Given the breadth of the document categories identified in the Voluntary Request Letter and the volume of potentially relevant materials — particularly ESI generated in the ordinary course of the Bank's digital lending operations — BRB anticipates that a phased or rolling production schedule may be the most efficient approach. We are committed to providing the Staff with initial productions as promptly as practicable and to maintaining a regular production schedule thereafter.

Privilege Considerations. BRB seeks to discuss with the Staff appropriate protocols for handling privileged and protected materials. In particular, BRB proposes that the parties agree on clawback procedures pursuant to Federal Rule of Evidence 502(d) (or an analogous agreement) to address the inadvertent production of privileged materials. BRB also wishes to discuss the format and content of any privilege log that the Staff may require, including any applicable de minimis thresholds or categorical logging approaches.

BRB notes and appreciates the Staff's issuance of this inquiry as a voluntary request, rather than through compulsory process, and the Bank's corresponding intent is to respond cooperatively and substantively without the need for the issuance of a formal order of investigation or subpoena, to the extent practicable. BRB believes that this approach is consistent with the cooperative posture described above and will best serve the interests of both the Bank and the Staff.

To that end, BRB proposes that a telephonic or in-person meet-and-confer be scheduled during the weeks of October 2, 2023, or October 9, 2023, at the Staff's preference. Ms. Chambers and Ms. Thornton are available on the following dates and times, among others: October 3 (afternoon), October 4 (morning or afternoon), October 5 (morning), October 10 (morning or afternoon), October 11 (full day), and October 12 (morning). We are, of course, willing to accommodate the Staff's schedule and can adjust our availability as needed. BRB is also willing to travel to the Commission's offices in Washington, D.C. if the Staff believes that an in-person meeting would be more productive than a telephone conference.

V. Preliminary Identification of Key Contacts at BRB

To facilitate the Staff's planning and to provide context for the Bank's organizational structure as it relates to the subject matter of the inquiry, BRB wishes to identify the following key individuals whose roles are relevant to the matters under review:

Derek Sung, General Counsel and Chief Legal Officer. Mr. Sung serves as the primary internal legal contact for this matter and is coordinating BRB's response to the Voluntary Request Letter. Mr. Sung oversees BRB's legal department and is responsible for the Bank's legal and regulatory compliance functions.

Patricia Navarrete, Chief Financial Officer. Ms. Navarrete is responsible for BRB's financial reporting, including the Bank's periodic reports filed with the Commission. Ms. Navarrete oversees the preparation and review of BRB's Forms 10-K and 10-Q, and she certifies the Bank's financial statements pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

Raymond Hu, Chief Accounting Officer. Mr. Hu is responsible for BRB's accounting policies and the application of generally accepted accounting principles to the Bank's financial statements. Mr. Hu's responsibilities include oversight of the Bank's implementation of the CECL methodology under ASC 326, including the estimation of the allowance for credit losses across BRB's lending portfolios.

Annette Kowalski, Chief Risk Officer. Ms. Kowalski oversees BRB's enterprise risk management function, including credit risk management and loss estimation. Ms. Kowalski's team is responsible for developing, calibrating, and validating the Bank's credit loss models, including those applied to the BridgeFin portfolio.

Naveen Chakravarti, Senior Vice President and Division Head, BridgeFin. Mr. Chakravarti is responsible for the operations of BRB's BridgeFin digital lending platform, including loan origination, underwriting, servicing, and portfolio management.

The identification of these individuals is provided solely in the spirit of cooperation and to assist the Staff in understanding the Bank's organizational structure as it relates to the subject matter of the inquiry. BRB reserves all rights regarding the scope and manner of any future testimony, interviews, or depositions of these or other individuals. Nothing in this letter should be construed as a commitment by BRB or any individual to submit to an interview or provide testimony, and any such request will be addressed separately as it arises. Furthermore, the identification of these individuals does not constitute a waiver of any privilege, protection, or right, including but not limited to the attorney-client privilege, the work-product doctrine, or the bank-examination privilege, with respect to any communications involving these individuals or any other BRB personnel.

VI. Reservation of Rights

BRB wishes to make clear that this letter and BRB's cooperation with the Staff's inquiry do not constitute, and shall not be construed as, an admission of any wrongdoing, violation of any federal or state securities law or regulation, or any deficiency in the Bank's public filings, financial statements, disclosures, or internal controls over financial reporting. BRB has at all times endeavored to comply with its obligations under the federal securities laws and applicable accounting standards, and nothing in this letter should be interpreted to the contrary.

BRB reserves all rights, privileges, protections, and defenses available to it under applicable law, including but not limited to:

(a) the attorney-client privilege;

(b) the work-product doctrine, including both fact and opinion work product;

(c) the bank-examination privilege, to the extent applicable to communications and materials shared with or generated at the direction of the Bank's prudential regulators, including the Office of the Comptroller of the Currency;

(d) any applicable joint-defense or common-interest privileges; and

(e) any other privilege, protection, or immunity available under federal or state law.

BRB's voluntary production of documents or information to the Staff in connection with this inquiry shall not be deemed a waiver of any applicable privilege or protection as to any third party, and BRB expressly reserves the right to assert all such privileges and protections in any other proceeding, investigation, or litigation. BRB understands that the Commission's Division of Enforcement has adopted policies regarding the treatment of privileged materials received from cooperating parties, and BRB expects that any privileged materials inadvertently produced will be promptly returned or destroyed in accordance with applicable clawback procedures.

BRB further reserves the right to supplement, amend, or correct any information provided to the Staff as additional facts become known in the course of BRB's ongoing internal review and document collection. BRB's responses to the Staff's inquiry are based on information presently available, and BRB undertakes to promptly notify the Staff of any material changes or corrections to the information provided herein.

VII. Closing

BRB looks forward to working cooperatively with the Staff to resolve this inquiry promptly and efficiently. The Bank is committed to providing the Staff with the information necessary to address the Staff's questions and concerns, and BRB believes that the collaborative approach outlined in this letter will best serve the interests of all parties.

We respectfully request that the Staff contact Victoria Chambers at (212) 634-7823 or vchambers@calderwoodharkness.com, or Jasmine Thornton at (212) 634-7841 or jthornton@calderwoodharkness.com, to arrange the proposed meet-and-confer at the Staff's earliest convenience.

We thank the Staff for its consideration of the matters set forth herein and for its professional courtesy throughout this process. We look forward to hearing from you.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Victoria Chambers Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct Telephone: (212) 634-7823

Email: vchambers@calderwoodharkness.com

cc: Derek Sung, General Counsel, Belmont Ridge Bank National Association cc: Christopher Yuen, Staff Attorney, Division of Enforcement, U.S. Securities and Exchange Commission cc: Howard Quinn, Calderwood & Harkness LLP cc: Jasmine Thornton, Calderwood & Harkness LLP

Enclosures: None

CALDERWOOD & HARKNESS LLP Attorneys at Law
425 Lexington Avenue, 30th Floor New York, New York 10017
Telephone: (212) 634-7800 Facsimile: (212) 634-7801
September 29, 2023
VIA ELECTRONIC MAIL AND OVERNIGHT COURIER
Andrea Felton, Senior Staff Attorney 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 File No. HO-14287
Dear Ms. Felton:
I. Entry of Appearance and Identification of Client
Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H") has been retained by Belmont Ridge Bank National Association ("BRB" or the "Bank") in connection with the above-referenced matter. By this letter, Calderwood & Harkness enters its appearance as counsel to BRB in connection with the investigation referenced in the Staff's voluntary request letter dated September 18, 2023.
Victoria Chambers, Partner, is the responsible partner and primary point of contact for this engagement. All future communications, document requests, subpoenas, correspondence, and other inquiries regarding this matter should be directed to:
Victoria Chambers, Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct Telephone: (212) 634-7823
Email: vchambers@calderwoodharkness.com
In addition, Jasmine Thornton, Lead Associate, will serve as the day-to-day contact for the engagement and is authorized to communicate with the Staff on BRB's behalf regarding scheduling, production logistics, and other matters arising in the ordinary course of the inquiry. Ms. Thornton's contact information is as follows:
Jasmine Thornton, Associate Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct Telephone: (212) 634-7841
Email: jthornton@calderwoodharkness.com
By way of background, BRB is a national banking association organized under the laws of the United States and operating pursuant to OCC Charter No. 24891. The Bank is headquartered at 200 Park Avenue South, 38th Floor, New York, New York 10003. BRB's common stock is listed on the Nasdaq Stock Market under the ticker symbol "BRDG." The Bank is a reporting company subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended.
We note for the Staff's records that BRB was previously represented by Caldwell Pratt & Stein LLP in connection with securities reporting matters and related regulatory correspondence. Martin Caldwell of that firm initially received the Staff's voluntary request letter dated September 18, 2023, and promptly notified BRB of its receipt. Subsequently, BRB retained Calderwood & Harkness specifically for purposes of responding to the Staff's inquiry in this matter. Any prior communications between the Staff and Caldwell Pratt & Stein LLP regarding BRB's securities filings were in the context of that firm's prior engagement and do not reflect the scope of Calderwood & Harkness's current representation. We understand that Mr. Caldwell has separately communicated to the Staff his firm's withdrawal as counsel of record in connection with this matter.
We wish to confirm that Calderwood & Harkness's engagement encompasses the representation of BRB, the entity, in connection with the Staff's investigation. Calderwood & Harkness does not represent any individual officer, director, or employee of BRB in their personal capacity in connection with this matter. Should any individual associated with BRB require separate counsel, we will advise such individual to retain independent representation.
II. Acknowledgment of Receipt of the Voluntary Request Letter
BRB confirms that it received the Staff's voluntary request letter dated September 18, 2023 (the "Voluntary Request Letter"). We acknowledge receipt of this letter and have carefully reviewed its contents with our client.
BRB understands that the Voluntary Request Letter relates to the Bank's public filings with the Commission, specifically the following:
(a) BRB's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (filed with the Commission on February 28, 2023);
(b) BRB's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 (filed with the Commission on May 10, 2023); and
(c) BRB's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 (filed with the Commission on August 9, 2023).
BRB further acknowledges that the Staff's inquiry concerns, among other matters, the adequacy of the Bank's disclosures relating to its allowance for credit losses ("ACL"), particularly as applied to the Bank's BridgeFin digital lending portfolio. BRB understands that the Staff's inquiry may also encompass related matters, including the Bank's implementation of the Current Expected Credit Losses ("CECL") methodology under Accounting Standards Codification Topic 326, Financial Instruments — Credit Losses ("ASC 326"), as it pertains to the BridgeFin portfolio, and the extent to which the Bank's disclosures provided investors with material information regarding the credit risk characteristics, loss estimation methodologies, and performance trends associated with that portfolio.
BRB understands the seriousness of this inquiry and the importance of providing the Staff with complete, accurate, and timely information. The Bank is committed to engaging with the Staff in a forthright and transparent manner throughout the course of this investigation.
III. Confirmation of BRB's Cooperation Posture
BRB wishes to affirmatively state, at the outset, that the Bank intends to cooperate fully with the Staff's inquiry. BRB is committed to transparency and to working constructively with the Division of Enforcement to address the Staff's questions and concerns. The Bank recognizes that meaningful cooperation, as set forth in the Commission's framework for evaluating cooperation by individuals and companies in enforcement proceedings, requires timely and substantive engagement, and BRB is prepared to meet that standard.
To that end, BRB has already taken several initial steps to identify, preserve, and collect documents and information responsive to the categories identified in the Voluntary Request Letter. Among other actions:
• Upon receipt of the Voluntary Request Letter, BRB promptly instituted a comprehensive litigation hold directing relevant custodians to preserve all potentially relevant documents, communications, and electronically stored information ("ESI"). The litigation hold was issued to, among others, senior management of the Bank, personnel within the BridgeFin division, the accounting and finance departments, risk management personnel, internal audit staff, and legal department staff. The litigation hold memorandum was distributed on September 20, 2023, within two business days of the Bank's receipt of the Voluntary Request Letter, and directed custodians to suspend any routine document destruction or deletion protocols as they may apply to materials within the scope of the inquiry.
• BRB has engaged its information technology and records management teams to identify the relevant repositories, systems, and data sources that may contain responsive materials, including the Bank's email systems, shared network drives, document management platforms, the BridgeFin loan origination and servicing platform, and the Bank's financial reporting and accounting systems.
• BRB has commenced an internal review to identify and organize materials responsive to the specific document categories set forth in the Voluntary Request Letter, subject to the meet-and-confer process described below regarding the scope and parameters of the Bank's collection and production efforts.
BRB is prepared to engage in a cooperative dialogue with the Staff to facilitate an efficient and thorough review and to minimize any unnecessary burden on either party. The Bank believes that a collaborative approach will serve the mutual interests of BRB and the Staff in reaching a resolution of the inquiry in a timely and orderly fashion.
IV. Request for Meet-and-Confer Regarding Scope and Timing
BRB respectfully requests an opportunity to meet and confer with the Staff at the Staff's earliest convenience to discuss the scope and timing of BRB's response to the Voluntary Request Letter. We believe that an early dialogue will help ensure that BRB's collection, review, and production efforts are appropriately targeted and responsive to the Staff's areas of interest, while also allowing the parties to establish mutually agreeable protocols for document production and information exchange.
Specifically, BRB proposes that the meet-and-confer address the following topics:
Scope of Document Categories. BRB seeks clarification of the categories of documents and information sought by the Staff to ensure that the Bank's collection efforts are appropriately targeted and responsive. In particular, certain categories identified in the Voluntary Request Letter — including, for example, the request for "all documents and communications relating to the development, calibration, and validation of credit loss models" — are potentially broad in scope, and we believe that a discussion with the Staff regarding the specific areas of focus within those categories would enable BRB to prioritize its efforts and provide the Staff with the most relevant materials in an efficient manner.
Relevant Time Period. BRB seeks confirmation of the relevant time period for responsive materials. Based on the Staff's references to the Form 10-K for fiscal year ended December 31, 2022, and the Forms 10-Q for Q1 and Q2 2023, BRB's preliminary understanding is that the inquiry focuses on the FY 2022 and Q1–Q2 2023 reporting periods. However, BRB recognizes that documents and communications from earlier periods may provide relevant context regarding the development and evolution of the Bank's ACL methodology as applied to the BridgeFin portfolio, and we seek the Staff's guidance as to the appropriate temporal scope.
Custodian Identification. BRB proposes to discuss with the Staff the appropriate custodians whose files should be searched in connection with the document collection. BRB is willing to propose an initial custodian list for the Staff's review and comment, and we anticipate that a collaborative discussion regarding custodian selection will help ensure that the relevant materials are identified without unnecessary duplication or burden. We expect that the initial custodian list will include individuals within BRB's accounting, finance, risk management, BridgeFin division, internal audit, and legal functions, but we welcome the Staff's input regarding any additional custodians the Staff believes are relevant.
Document Format and Production Protocols. BRB seeks to agree with the Staff on the format for any document production and related production protocols. BRB proposes producing documents in TIFF image format with extracted text and associated metadata, in accordance with the Staff's standard production specifications. BRB further seeks agreement on Bates-number stamping conventions (BRB proposes using the prefix "BRB-ENF-" followed by sequential numbering), search methodologies including keyword search terms and date ranges, and any applicable deduplication protocols. In addition, BRB wishes to discuss with the Staff appropriate confidentiality protections for proprietary business information that may be responsive to the Staff's requests, including, without limitation, information relating to BRB's AI-driven underwriting models, proprietary algorithms, and trade secrets that are integral to the Bank's BridgeFin digital lending platform. BRB anticipates requesting that any such materials be accorded confidential treatment under 17 C.F.R. § 200.83, and we welcome the opportunity to discuss the appropriate procedures for making and processing such a request.
Timeline for Production. BRB seeks to discuss with the Staff a reasonable timeline for the Bank to identify, collect, review, and produce responsive documents and information. Given the breadth of the document categories identified in the Voluntary Request Letter and the volume of potentially relevant materials — particularly ESI generated in the ordinary course of the Bank's digital lending operations — BRB anticipates that a phased or rolling production schedule may be the most efficient approach. We are committed to providing the Staff with initial productions as promptly as practicable and to maintaining a regular production schedule thereafter.
Privilege Considerations. BRB seeks to discuss with the Staff appropriate protocols for handling privileged and protected materials. In particular, BRB proposes that the parties agree on clawback procedures pursuant to Federal Rule of Evidence 502(d) (or an analogous agreement) to address the inadvertent production of privileged materials. BRB also wishes to discuss the format and content of any privilege log that the Staff may require, including any applicable de minimis thresholds or categorical logging approaches.
BRB notes and appreciates the Staff's issuance of this inquiry as a voluntary request, rather than through compulsory process, and the Bank's corresponding intent is to respond cooperatively and substantively without the need for the issuance of a formal order of investigation or subpoena, to the extent practicable. BRB believes that this approach is consistent with the cooperative posture described above and will best serve the interests of both the Bank and the Staff.
To that end, BRB proposes that a telephonic or in-person meet-and-confer be scheduled during the weeks of October 2, 2023, or October 9, 2023, at the Staff's preference. Ms. Chambers and Ms. Thornton are available on the following dates and times, among others: October 3 (afternoon), October 4 (morning or afternoon), October 5 (morning), October 10 (morning or afternoon), October 11 (full day), and October 12 (morning). We are, of course, willing to accommodate the Staff's schedule and can adjust our availability as needed. BRB is also willing to travel to the Commission's offices in Washington, D.C. if the Staff believes that an in-person meeting would be more productive than a telephone conference.
V. Preliminary Identification of Key Contacts at BRB
To facilitate the Staff's planning and to provide context for the Bank's organizational structure as it relates to the subject matter of the inquiry, BRB wishes to identify the following key individuals whose roles are relevant to the matters under review:
Derek Sung, General Counsel and Chief Legal Officer. Mr. Sung serves as the primary internal legal contact for this matter and is coordinating BRB's response to the Voluntary Request Letter. Mr. Sung oversees BRB's legal department and is responsible for the Bank's legal and regulatory compliance functions.
Patricia Navarrete, Chief Financial Officer. Ms. Navarrete is responsible for BRB's financial reporting, including the Bank's periodic reports filed with the Commission. Ms. Navarrete oversees the preparation and review of BRB's Forms 10-K and 10-Q, and she certifies the Bank's financial statements pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.
Raymond Hu, Chief Accounting Officer. Mr. Hu is responsible for BRB's accounting policies and the application of generally accepted accounting principles to the Bank's financial statements. Mr. Hu's responsibilities include oversight of the Bank's implementation of the CECL methodology under ASC 326, including the estimation of the allowance for credit losses across BRB's lending portfolios.
Annette Kowalski, Chief Risk Officer. Ms. Kowalski oversees BRB's enterprise risk management function, including credit risk management and loss estimation. Ms. Kowalski's team is responsible for developing, calibrating, and validating the Bank's credit loss models, including those applied to the BridgeFin portfolio.
Naveen Chakravarti, Senior Vice President and Division Head, BridgeFin. Mr. Chakravarti is responsible for the operations of BRB's BridgeFin digital lending platform, including loan origination, underwriting, servicing, and portfolio management.
The identification of these individuals is provided solely in the spirit of cooperation and to assist the Staff in understanding the Bank's organizational structure as it relates to the subject matter of the inquiry. BRB reserves all rights regarding the scope and manner of any future testimony, interviews, or depositions of these or other individuals. Nothing in this letter should be construed as a commitment by BRB or any individual to submit to an interview or provide testimony, and any such request will be addressed separately as it arises. Furthermore, the identification of these individuals does not constitute a waiver of any privilege, protection, or right, including but not limited to the attorney-client privilege, the work-product doctrine, or the bank-examination privilege, with respect to any communications involving these individuals or any other BRB personnel.
VI. Reservation of Rights
BRB wishes to make clear that this letter and BRB's cooperation with the Staff's inquiry do not constitute, and shall not be construed as, an admission of any wrongdoing, violation of any federal or state securities law or regulation, or any deficiency in the Bank's public filings, financial statements, disclosures, or internal controls over financial reporting. BRB has at all times endeavored to comply with its obligations under the federal securities laws and applicable accounting standards, and nothing in this letter should be interpreted to the contrary.
BRB reserves all rights, privileges, protections, and defenses available to it under applicable law, including but not limited to:
(a) the attorney-client privilege;
(b) the work-product doctrine, including both fact and opinion work product;
(c) the bank-examination privilege, to the extent applicable to communications and materials shared with or generated at the direction of the Bank's prudential regulators, including the Office of the Comptroller of the Currency;
(d) any applicable joint-defense or common-interest privileges; and
(e) any other privilege, protection, or immunity available under federal or state law.
BRB's voluntary production of documents or information to the Staff in connection with this inquiry shall not be deemed a waiver of any applicable privilege or protection as to any third party, and BRB expressly reserves the right to assert all such privileges and protections in any other proceeding, investigation, or litigation. BRB understands that the Commission's Division of Enforcement has adopted policies regarding the treatment of privileged materials received from cooperating parties, and BRB expects that any privileged materials inadvertently produced will be promptly returned or destroyed in accordance with applicable clawback procedures.
BRB further reserves the right to supplement, amend, or correct any information provided to the Staff as additional facts become known in the course of BRB's ongoing internal review and document collection. BRB's responses to the Staff's inquiry are based on information presently available, and BRB undertakes to promptly notify the Staff of any material changes or corrections to the information provided herein.
VII. Closing
BRB looks forward to working cooperatively with the Staff to resolve this inquiry promptly and efficiently. The Bank is committed to providing the Staff with the information necessary to address the Staff's questions and concerns, and BRB believes that the collaborative approach outlined in this letter will best serve the interests of all parties.
We respectfully request that the Staff contact Victoria Chambers at (212) 634-7823 or vchambers@calderwoodharkness.com, or Jasmine Thornton at (212) 634-7841 or jthornton@calderwoodharkness.com, to arrange the proposed meet-and-confer at the Staff's earliest convenience.
We thank the Staff for its consideration of the matters set forth herein and for its professional courtesy throughout this process. We look forward to hearing from you.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Victoria Chambers Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 Direct Telephone: (212) 634-7823
Email: vchambers@calderwoodharkness.com
cc: Derek Sung, General Counsel, Belmont Ridge Bank National Association cc: Christopher Yuen, Staff Attorney, Division of Enforcement, U.S. Securities and Exchange Commission cc: Howard Quinn, Calderwood & Harkness LLP cc: Jasmine Thornton, Calderwood & Harkness LLP
Enclosures: None

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA ELECTRONIC MAIL AND OVERNIGHT COURIER

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts