Regions Financial Directors Must Face $191 Million Lawsuit (1)

Regions Financial Corp. board members lost their bid to end shareholder litigation blaming them personally for a $191 million enforcement settlement stemming from its illegal overdraft policies.

A Delaware judge let the lawsuit move forward Monday, saying it’s conceivable the bank’s senior leaders steered it into a “corporate trauma” by condoning the practices while they tried to drum up offsetting revenues. If the allegations are true, the CEO and other directors turned a blind eye to red flags—including a whistleblower complaint—instead of working to head off legal trouble, the judge said.

Although the board hired a law firm to investigate, ...