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 made materially false and misleading statements and/or failed to disclose material adverse facts about its business, operations, and prospects, including that Banc had large ties to an alleged "fraudster" named Jason Galanis ("Galanis") and that these connections could create substantial regulatory risk and jeopardize the market price of the Company's stock. Consequently, Defendants' positive statements about Banc's business, operations, and prospects were false and misleading and/or lacked a reasonable basis throughout the Class Period.
On September 7, 2016, Bloomberg News published a report 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 stated that such "transactions, even when disclosed, should serve as warning signs for investors when deciding whether to buy stock." In less than a week of article being published, Banc's stock dropped under $21 per share. On September 20, 2016, Banc revealed that its CFO had resigned after only a year on the job. Following this news, Banc's stock dropped again, and went from $20.51 per share to just $17.61 per share within a week.
On October 18, 2016, Seeking Alpha published a report alleging that Banc of California had been concealing its numerous connections with Jason Galanis, who had been convicted of criminal securities fraud, including that: (1) Banc of California CEO Jason Sugarman was the founder, CEO, and indirect owner of a company controlled by Galanis; and (2) Galanis controlled Banc of California's founding shareholder. The article also wrote that Banc of California had used an off-balance sheet entity to make loans to insiders. Following this news, Banc of California stock dropped over 29% per share to close at $11.26 per share on October 18, 2016.
On November 10, 2016, Banc of California revealed that it was postponing the filing of its Form 10-Q Quarterly Report for the fiscal quarter ended September 30, 2016 in order for its Special Committee to finish its review of certain purported improper relationships and related party transactions. On January 23, 2017, Banc of California announced CEO Sugarman's resignation and divulged that the U.S. Securities and Exchange Commission had opened an investigation into whether Banc of California had misled investors in its response to the October 2016 Seeking Alpha report. Following this news, Banc of California stock has dropped as much as $1.75 per share, or 10.84%, to a low of $14.40 on January 23, 2017.
Then, on January 23, 2017, Banc issued a press release divulging the resignation of its CEO and Chairman of the Board, Steven A. Sugarman, and said that the SEC had initiated 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 where Banc had mischaracterized the investigation into Seeking Alpha's allegations. Following this news, Banc stock dropped $1.50 per share, or 9%, to close at $14.65 per share on January 23, 2017.
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm's site: http://www.bgandg.com/banc or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Banc you have until March 24, 2017 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm's expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Hurwitz
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SOURCE Bronstein, Gewirtz & Grossman, LLC