[Code of Federal Regulations]
[Title 12, Volume 3]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR250.404]

[Page 687]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 250--MISCELLANEOUS INTERPRETATIONS--Table of Contents
 
Sec. 250.404  Serving as director of member bank and corporation selling own stock.

    (a) The Board recently considered the question whether section 32 of 
the Banking Act of 1933 (12 U.S.C. 78) would be applicable to the 
service of a director of a corporation which planned to acquire or 
organize, as proceeds from the sale of stock became available, 
subsidiaries to operate in a wide variety of fields, including 
manufacturing, foreign trade, leasing of heavy equipment, and real 
estate development. The corporation had a paid-in capital of about 
$60,000 and planned to sell additional shares at a price totaling $10 
million, with the proviso that if less than $3 million worth were sold 
by March 1962, the funds subscribed would be refunded. It thus appeared 
to be contemplated that the sale of stock would take at least a year, 
and there appeared to be no reason for believing that, if the venture 
proved successful, additional shares would not be offered so that the 
corporation could continue to expand.
    (b) The Board concluded that section 32 would be applicable, stating 
that although Sec. 218.102, as clarified by Sec. 218.104, related to 
closed-end investment companies, the rationale of that interpretation is 
applicable to corporations generally.

[26 FR 2456, Mar. 23, 1961. Redesignated at 61 FR 57289, Nov. 6, 1996]