Reg O - Preferential Treatment

Answered by:

Question:

Does Regulation O cover preferential treatment in board and executive compensation? Also, would preferential treatment surrounding vendor service agreements with the related interests of insiders be covered in Reg O?

Answer:

Answer by John Burnett:Regulation O covers only lending to insiders: executive officers, directors and principal shareholders. It does not cover board or executive compensation (except for a prohibition against advances of salary for more than thirty days, which is considered a credit transaction) or vendor service agreements.

Answer:

Answer by Jim Bedsole:If you are a publicly-traded company, preferential treatment surrounding vendor service agreements with related interests would be covered under SEC and NYSE/NASDAQ regulations.

First published on BankersOnline.com 2/22/10