Ex-Commerce Bank CEO to pay $4 million to settle probe

WASHINGTON (Reuters) - Vernon Hill, former chief executive of Commerce Bancorp Inc, agreed to pay $4 million to settle allegations of unsafe banking practices, regulators said on Monday.

Commerce forced Hill out in June 2007 after regulators complained about dealings between the bank and partnerships controlled by Hill as well as an architectural design firm run by Hill's wife, Shirley.

Under the settlement with the U.S. Office of the Comptroller of the Currency (OCC), Hill will make the payment to Canada's Toronto-Dominion Bank (TD.TO: Quote), which bought Commerce for about $7.7 billion in March.

The OCC said Hill failed to comply with sound corporate governance principles related to real estate purchases, leases and joint real estate development transactions involving Commerce that financially benefited him.

The OCC said it entered into a cease-and-desist order with Hill, who is now restricted from conducting certain future real estate transactions with insured depositary institutions.

If he carries out transactions, he is required to report them to the bank's audit committee and board of directors, and if he is a senior executive or a major shareholder he must have an independent accounting firm issue an opinion that the transaction is fair.

After leaving Commerce, Hill who owns Burger King restaurants in Philadelphia returned to the food business and joined Saladworks Inc as chairman of its executive committee and as a big investor.

As part of the settlement Hill did not admit or deny the OCC's allegations.

(Reporting by John Poirier, editing by Gerald E. McCormick/Jeffrey Benkoe)