Jump to Navigation

Blog Post

SEC FILES FRAUD CHARGES VS. BANKATLANTIC BANCORP, INC.

Posted by: Robert Rex
January 23, 2012
Topic: SEC news

On January 18, 2012, The Securities and Exchange Commission filed securities fraud charges against BankAtlantic Bancorp, Inc. and its CEO and Chairman, Alan Levan, with securities fraud intended to hide growing problems early in the financial crisis. The complaint alleges that Bancorp and Levan made misleading statements in public filings and earnings calls regarding the deteriorating state of a large portion of Bancorp's commercial real estate portfolio in the first two quarters of 2007 and Bancorp and Levan improperly accounted for loans they were trying to sell from this portfolio in late 2007 to minimize Bancorp's losses.

The SEC's complaint alleges that Bancorp and Levan knew that a large portion of the commercial residential portfolio was deteriorating early in 2007 due to the fact that many of the loans had required extensions because of the borrowers' inability to meet their loan obligations. A number of loans were kept "current" only by extending the terms or replenishment of the interest reserves from an increase in the loan principal.

The SEC alleges that Bancorp and Levan tried to sell a number of the deteriorating loans after the announcement but failed to account for them properly because doing so would have required Bancorp to write them down, incurring immediate additional losses. As a result of this scheme, Bancorp understated its net loss by more than 10% .

Here is a link to the SEC complaint:

http://www.sec.gov/litigation/complaints/2012/comp22229.pdf

If you have questions about your brokerage account, call us at 561 391 1900 or visit our website at http://www.dmrslaw.com/.

 

News