The complaint charges Banc and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Banc is a financial holding company with operations in commercial, mortgage and corporate banking and financial advisory.
The complaint alleges that throughout the Class Period, defendants violated the federal securities laws by disseminating false and misleading statements to the investing public. As a result of defendants' false statements, Banc's stock traded at artificially inflated prices during the Class Period, reaching a high of $23.12 per share on August 8, 2016.
On September 7, 2016, Bloomberg News published an article on Banc highlighting several related-party transactions, including Banc paying $100 million for the naming rights on Los Angeles's new soccer stadium for a soccer team whose investors included the brother of Banc's CEO, "marking the latest in a series of deals involving the CEO's family and associates," and stating that such "transactions, even when disclosed, should serve as warning signs for investors when deciding whether to buy stock." Within a week of this article, Banc's stock price fell to below $21 per share. On September 20, 2016, Banc announced that its CFO had resigned after only a year on the job. On this news, Banc's stock price fell again, declining from $20.51 per share to $17.61 per share within a week.
On October 18, 2016, an article was published by Seeking Alpha that highlighted Banc's ties to alleged fraudsters. The article stated that Seeking Alpha had "conducted exhaustive due diligence into [Banc's] leadership team" and had established that Banc's "senior-most officers and board members have a broad mosaic of extensive and indisputable ties to Jason Galanis." According to Seeking Alpha, "[t]he mere presence of a bank leadership team associated with Galanis should send diligent investors running for the hills." On this news, the price of Banc stock fell $4.61 per share, or 29%, on October 18, 2016, to close at $11.26 per share. In response to the Seeking Alpha article, on October 18, 2016, Banc issued a press release announcing that the Company was aware of the Seeking Alpha allegations and that the Board of Directors had initiated a "thorough" and "independent" investigation through "Disinterested Directors."
Then, on January 23, 2017, Banc issued a press release announcing the resignation of its CEO and Chairman of the Board, Steven A. Sugarman, and revealed that the SEC had opened a formal order of investigation directed at certain of the issues that Banc's Special Committee was reviewing concerning the Company's response to the October 18, 2016 Seeking Alpha article in which Banc had mischaracterized the investigation into Seeking Alpha's allegations. As a result of this news, the price of Banc stock dropped $1.50 per share to close at $14.65 per share on January 23, 2017, a decline of 9%.
Plaintiff seeks to recover damages on behalf of all purchasers of Banc common stock during the Class Period (the "Class"). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as one of the leading law firms advising U.S. and international institutional investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history and was ranked first in both total amount recovered for investors and number of securities class action recoveries in ISS's SCAS Top 50 Report for the last two years. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm's clients. Robbins Geller not only secures recoveries for defrauded investors, it also strives to implement corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit rgrdlaw.com/cases/bancofcalifornia/ for more information.
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SOURCE Robbins Geller Rudman & Dowd LLP