ADMINISTRATIVE PROCEEDING
File No. 3-21474

May 31, 2023 - The Securities and Exchange Commission today announced settled charges against First Guaranty Bancshares, Inc. ("FGBI"), a Louisiana publicly-traded bank holding company that operates through its wholly-owned subsidiary, First Guaranty Bank ("FGB"), for failing to disclose repurchases of its common stock on the open market in its Forms 10-Q and 10-K. These repurchases were made in connection with an employee stock grant program for FGB employees and annual stock bonus awards made to FGB executives.

According to the SEC's order, from September 2016 through February 2021, FGB used an outside third party, who was not an employee of either FGB or FGBI, to purchase shares of FGBI common stock each quarter on the open market. Once the shares were purchased, the third party worked with FGB's administrative personnel to effectuate the sale of the FGBI shares to FGB. FGB never took possession of the FGBI shares, instead distributing them directly from the third party's book entry account held at FGB to select employees for that quarter and to its senior executives at year-end. In total, the third party purchased 119,020 shares of FGBI common stock for approximately $2.5 million in connection with the employee stock grant program and year-end executive bonuses.

The SEC's order finds that FGBI was required to disclose these quarterly and annual purchases made by the third party in FGBI's Forms 10-Q and 10-K between March 30, 2017 through May 10, 2021 pursuant to Item 703 of Regulation S-K, 17 C.F.R. § 229.703. Additionally, according to the SEC's order, FGBI failed to implement controls, policies, or procedures designed to ensure compliance with the disclosure requirements under Item 703.

The SEC's order finds that FGBI violated Section 13(a) of the Securities Exchange Act of 1934 and Rules 13a-1, 13a-13, and 13a-15(a) thereunder. Without admitting or denying the findings in the SEC's order, FGBI has consented to a cease-and-desist order, and agreed to pay a civil penalty of $600,000.

The SEC's investigation was conducted by Jordan A. Cortez and supervised by Eric R. Busto, Fernando Torres, and Glenn Gordon, with the assistance of trial counsel Teresa Verges.