Subject: Fwd: Trial Against BankAtlantic Corp. Ends in Historic Jury Verdict for Shareholders - Barroway Topaz takes only tenth shareholder class action to verdict
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Thu, 18 Nov 2010 18:55:51 -0500

Amazing that this is only the 10th securities class action taken to a jury verdict since PSLRA.

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email-masked]
P Consider the environment before printing this email.

Begin forwarded message:

From: "Darren Check" <[email-masked]>
Date: November 18, 2010 6:46:07 PM EST
To: "Darren Check" <[email-masked]>
Subject: Trial Against BankAtlantic Corp. Ends in Historic Jury Verdict for Shareholders - Barroway Topaz takes only tenth shareholder class action to verdict

Dear Colleagues,
 
It is with great pleasure that I announce to you a great victory we were able to secure for shareholders in a rare trial of a securities class action that recently concluded in Federal Court in Miami, Florida.  As you can see from the press release below this was a hard fought battle and we believe sets a precedent for a good amount of other pending litigation against financial institutions in the wake of the recent credit crisis.  Furthermore, we hope that this demonstrates to our clients and advesaries how zealously we will advocate the interests of the classes we represent.  This is only the tenth trial to go to a jury verdict since the passage of the current securities laws (the PSLRA) in 1995.  We are especially proud of this result and our trial team and thankful to Sue Weber and the Erie County Employees' Retirement System which served as one of the lead plaintiffs in this case.  We will have a more detailed report in the next BTKMC Bulletin, but please feel free to contact me if you have any immediate questions or need additional information.
 
Best regards,
-Darren
 
Jury Finds BankAtlantic Lied To Stockholders Over Risky Loans 
Jury verdict in rare securities fraud case; law firms Labaton Sucharow and Barroway Topaz represent institutional investor plaintiffs; award cites bank’s failure to disclose extent of troubled real estate loans and false statements

MIAMI/NEW YORK (November 18, 2010) –  In a rare courtroom trial of a securities fraud class action, a federal jury in Miami has awarded a group of institutional investors a verdict finding securities fraud against BankAtlantic Bancorp, Inc. and two senior officers for lying about and failing to disclose the extent of risk in its troubled loan portfolio in 2007.  This is the first securities class action case arising out of the financial crisis to go to jury verdict. The jury found that investors overpaid by $2.41 per share between April 26, 2007 and October 26, 2007 which resulted in millions of dollars in damages for the class.

Investors were represented jointly at trial by leading plaintiffs’ law firms Labaton Sucharow LLP and Barroway Topaz Kessler Meltzer & Check LLP.   Labaton Sucharow represented State-Boston Retirement System, lead plaintiff in the federal class action lawsuit.  Barroway Topaz represented Erie County Employees’ Retirement System as co-class counsel.

This was only the 12th securities fraud class action to go to trial since passage of the historic Private Securities Litigation Reform Act in 1995 – the vast majority of such cases settle before reaching a courtroom. The PSLRA allowed institutional investors to serve as lead plaintiffs in federal securities actions. It is believed that this is the second successful plaintiffs verdict in a securities class action case led by a public pension fund.

During the four-week trial, investors accused Ft. Lauderdale-based BankAtlantic of serial misrepresentations and omissions regarding the extent of the high risk loans in its so-called “land loan” portfolio – those made for acquisition and development of residential buildings in Florida – between October 2006 and October 2007.  Prior to trial, Southern District of Florida Judge Ursula Ungaro ruled that four statements made by BankAtlantic Chairman and CEO Alan Levan about the health of the bank’s land loan portfolio were false.  Levan made those statements on a July 2007 conference call with investors, four months after writing an internal email admitting, “I believe we are in for a long sustained problem in this sector.”

“We’re gratified the jury held BankAtlantic and its senior management accountable for misleading investors and causing millions of dollars of losses,” said Labaton Sucharow partner Mark Arisohn, plaintiffs’ lead trial attorney.  “BankAtlantic knew of the high risk that was growing in its loan portfolio but for a year lied to its stockholders about the extent of that risk.  Florida citizens on the jury sent a message by finding the defendants committed securities fraud. Banks and their management cannot intentionally mislead their stockholders about the extent of lending risk,” added Arisohn.

The jury also was shown extensive e-mails from a BankAtlantic lending manager, who described the bank’s major loan committee as “asleep at the wheel.”  In one communication about a loan, the executive wrote, “I hate these deals and think the MLC is blinded by GREED and focused only on [interest] rates…We never analyze the risks up front, only on the downside, when the learning curve is steep and most expensive.”

In an email dated November 30, 2007, the lending manager wrote:  “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 trial opened a most revealing window into fundamentally dishonest reports BankAtlantic made to its stockholders about the riskiness of its land portfolio,” said Barroway Topaz partner Andrew Zivitz, who along with partner Matthew Mustokoff shared trial duties with the Labaton Sucharow firm. “The jury’s award represents a clear rebuke for the bank’s deceitful  disclosure practices. But it’s also an historic success for investors who were victimized by the bank’s behavior.”

Labaton Sucharow also represented investors in litigation alleging securities law violations by Countrywide Financial Corporation, one of the largest providers of consumer housing loans prior to the bursting of the housing bubble.  The $624 million proposed settlement in that litigation is the second-largest securities settlement of 2010.   

Barroway Topaz is currently representing a group of U.S. and European pension funds in a shareholder class action in federal court in New York against Bank of America related to its purchase of Merrill Lynch, one of the most significant shareholder cases currently before the Court. 

The full case caption for the BankAtlantic case is, In re BankAtlantic Bancorp, Inc. Securities Litigation (No. 07-61542 S.D. Fla.).

___________________________________
Darren J. Check, Esquire

280 King of Prussia Road
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General Firm Phone:  610-667-7706 
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e-mail: [email-masked]
Internet: www.btkmc.com

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