The jury found in favor of the defendants on all counts in bodog bonus code civil suit filed by the SEC.
Retained by Stearns Weaver Miller Weissler Alhadeff & Sitterson
Defense counsel for BankAtlantic and its CEO retained Cornerstone Research and Professor Christopher M. James of the University of Florida to assess alleged disclosure fraud in a civil suit filed by the U.S. Securities and Exchange Commission (SEC).
The SEC alleged that, in 2007, the defendants misled investors about the risks associated with a portion of the bank’s land loan portfolio by not disclosing information about their internal watch list and ratings downgrades. To assess the SEC’s allegations, Professor James reviewed comparable financial institutions’ loan disclosures. Professor James’s analysis demonstrated that disclosures of internal watch lists and ratings downgrades were not customary for the banking industry.
Professor James demonstrated that disclosures of internal watch lists and ratings downgrades were not customary for the banking industry.
Professor James also opined on the sudden and unexpected crisis in the credit market that erupted in August 2007 and negatively affected real-estate markets. He noted that due to the timing of bodog bonus code crisis, in the first and second quarters of 2007, BankAtlantic could have neither foreseen nor disclosed the loan losses that manifested in the third quarter of that year.
Cornerstone Research was first retained in 2012, when the SEC filed the original complaint. In 2013, the SEC won partial summary judgment, which resulted in an erroneous instruction that defendants had made false statements. In 2014, a split jury found the bank and its CEO not liable on some claims and liable on others. In 2016, the Eleventh Circuit Court of Appeals reversed and vacated the claims the SEC had won and remanded for a new trial on those claims.
After a six-week trial in 2017, the jury found in favor of the defendants and rejected all SEC claims. The SEC chose not to appeal.