The US District Court for the Southern District of Florida recently refused to reconsider its earlier decision granting partial summary judgment in favor of the Securities and Exchange Commission in a securities fraud case against BankAtlantic Bancorp, Inc. The SEC alleged that BankAtlantic Bancorp, Inc., now known as BBX Capital Corporation (BBX or Bank), failed to disclose problems with its commercial real estate portfolio. After the court granted summary judgment in favor of the SEC on the issue of falsity, BBX moved for reconsideration.
In finding that BBX had not met the high standard necessary for a motion to reconsider, the court noted that the Bank did not disclose—and in some cases affirmatively misrepresented—“the existing trend of crumbling creditworthiness evident in the entire Commercial Residential Portfolio.” The court rejected BBX’s argument that it made adequate disclosures, explaining that the Bank “cannot inoculate [itself] from liability by informing investors about potential problems that might arise based on what the market may do in the future … when, at the same time, they failed to disclose to investors current problematic trends [it] knew about.”
The case is currently scheduled for trial in November.
SEC v. BankAtlantic Bancorp,. Inc. et al., Case No. 12-cv-60082 (S.D. Fla. Jan. 30, 2014).
