---
kind: "section"
citation: "12 C.F.R. § 250.404"
title: "12"
number: "250.404"
heading: "Serving as director of member bank and corporation selling own stock."
url: "https://uscodex.org/cfr/12/250.404"
---

# §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](/usc/12/78.md)) 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](/cfr/12/32.md) would be applicable, stating that although [§ 218.102](/cfr/12/218.102.md), as clarified by [§ 218.104](/cfr/12/218.104.md), related to closed-end investment companies, the rationale of that interpretation is applicable to corporations generally.

## Notes

### Amendments

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

### Authority

Authority: 12 U.S.C. 78, 248(i), 371c(f) and 371c-1(e).

### Source

Source: 33 FR 9866, July 10, 1968, unless otherwise noted.

### Amendments

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