A flurry of lawsuits and class actions were recently filed against Lender Processing Service Inc. by the company’s investors. A rare courtroom trial ended in a judgment against a bank after e-mails from the institution’s lending manager were presented as evidence, and two big banks recently settled investor-related actions.
A class-action lawsuit filed in U.S. District Court for the Middle District of Florida on behalf of investors who purchased common stock of LPS alleges violations of the Securities Exchange Act of 1934. The case was filed by the law firm of Lieff Cabraser Heimann & Bernstein LLP.
The class period is from July 29, 2009, until Oct. 4, 2010.
LPS allegedly failed to disclose that it engaged in improper and deceptive business practices. The company’s subsidiary, Docx, is accused of falsifying documents through the use of “robo signers.”
Another allegation includes improper fee-sharing arrangements with attorneys and law firms.
The Jacksonville, Fla.-based service provider also faces a lawsuit announced by the Bensalem, Pa., Law Offices of Howard G. Smith. That case was also filed in the U.S. District Court for the Middle District of Florida on behalf of LPS common stock investors for the exact same class period. Class-action certification is sought.
The San Diego-based Law Office of Robbins Umeda LLP said earlier this month that it was investigating whether LPS directors and officers “failed to disclose that the company had engaged in improper and deceptive business practices, and as a result, reported misleading financial results.”
Late last month, investor advocacy group the Shareholders Foundation Inc. announced a lawsuit filed in U.S. District Court for the Middle District of Florida against LPS. The complaint alleges that LPS violated federal securities laws.
Boca Raton, Fla.-based Robbins Geller Rudman & Dowd LLP said in November that it had commenced a class action against LPS on behalf of the City of St. Clair Shores General Employees’ Retirement System on Nov. 23. The case also targets common stock investors for the same class period as the other cases.
A federal jury in Miami has awarded a group of institutional investors a judgment against BankAtlantic Bancorp Inc., according to a November news release from the law firms of Labaton Sucharow and Barroway Topaz. The firm called the courtroom trial “rare.”
At issue in the BankAtlantic case was its acquisition-and-development portfolio. The loans were made during the 12 months ended October 2007. The plaintiffs claimed the bank lied about the extent of risk on the portfolio.
An internal e-mail from a BankAtlantic lending manager allegedly said that “the bank’s major loan committee as ‘asleep at the wheel.'” Another message reportedly said, “We all have problems when we make loans “but being this dishonest and hiding the problems so long until you can’t any longer, is cause for termination and borderline criminal.”
The statement indicated that the BankAtlantic case was only the 12th securities fraud class action to go to trial since the Private Securities Litigation Reform Act was passed in 1995.
“The vast majority of such cases settle before reaching a courtroom.”
Investors of Green Bankshares Inc. from Jan. 19 to Nov. 9 filed a class-action lawsuit in U.S. District Court for the Eastern District of Tennessee, according to a Nov. 18 statement from Glancy Binkow & Goldberg LLP. The plaintiffs allege Green Bankshares overvalued the collateral of certain loans.
Also last month, Banc of America Investment Services was fined $100,000 by the State of Massachusetts Securities Division. In addition, extensive training was ordered.
“The complaint is based upon respondent’s dishonest and unethical violations of the [Massachusetts Uniform Securities Act] due to the misleading characterizations of the Fannie Mae and Freddie Mac federal agency step-up bonds respondent’s agents portrayed to at least one Massachusetts investor,” the complaint states.
Regions Financial Corp. faced a complaint filed on Oct. 20 in U.S. District Court for the Northern District of Alabama, Robbins Geller Rudman & Dowd LLP reported. Investors who purchased the Birmingham, Ala.-based bank’s securities from Feb. 27, 2008, to Jan. 19, 2009, are represented in the case.
A lawsuit filed in U.S. District Court for the Western District of Tennessee against Regions and several subsidiaries was “stayed pending receipt of the New Board’s response to Plaintiffs’ demand or the expiration of the time allowed for response.” But Regions’ motion to dismiss was denied.
A dismissal request by American International Group Inc. was denied by a federal judge in Manhattan. The lead plaintiff is the State of Michigan Retirement Systems, as custodian of the Michigan Public School Employees Retirement System, the State Employees Retirement System, the Michigan State Police Retirement System and the Michigan Judges Retirement System.
Also in Manhattan, a federal judge approved a $75 million settlement between the SEC and Citigroup Inc., the New York Times reported. The judge required a rewording of the settlement agreement to make it clear that the money would be used to compensate shareholders who suffered losses over the New York-based company’s misstatements.
A lawsuit filed by investors challenging an $8.4 billion deal between Bank of America Corp. and state attorneys general was dismissed, WSJ.com reported. The investors had sought to force BofA to buy back the Countrywide Financial Corp. loans that were modified under the 2008 settlement.
Corporate Counsel recently reported that former Countrywide executives failed in their attempt to obtain a summary judgment in the SEC’s lawsuit against them. The trial was scheduled to begin in October.
Publicly traded banks and lenders need to avoid Hagens Berman Sobol Shapiro LLP, which touted in October its fourth time on the National Law Journal’s Plaintiff’s Hot List. The title is reportedly handed out to the 12 top “plaintiff law firms in the country that demonstrate impressive verdicts and settlements, and those firms taking on cases of significant public importance.”
In re BankAtlantic Bancorp, Inc. Securities Litigation
Case No. 07-61542 (U.S. District Court for the Southern District of Florida).
BILL BURGRAFF, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. GREEN BANKSHARES, INC., JAMES E. ADAMS, STEPHEN M. ROWND, and R. STAN PUCKETT, Defendants.
(U.S. District Court for the Eastern District of Tennessee).
In the Matter of Banc of America Investment Services Inc., Respondent.
Docket No. 2009-0090, June, 16, 2010 (Commonwealth of Massachusetts, Office of the Secretary of the Commonwealth Securities Division).
H. AUSTIN LANDERS, et al., Plaintiffs, v. MORGAN ASSET MANAGEMENT, INC., MORGAN KEEGAN & COMPANY, INC., MK HOLDING, INC., REGIONS FINANCIAL CORPORATION, REGIONS BANK, et al., Defendants.
Case No. MDL 2009, No. 08-2260. (U.S. District Court for the Western District of Tennessee, Western Division).
IN RE: AMERICAN INTERNATIONAL GROUP, INC. 2008 SECURITIES LITIGATION.
Case No. 08 Civ. 4772 (LTS) (U.S. District Court, S.D. New York). (posted by Leagle.com)
