Robbins Arroyo LLP: Banc of California, Inc. (BANC) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Banc of California, Inc. (NYSE: BANC) in the U.S. District Court for the Central District of California. The complaint is brought on behalf of all purchasers of Banc securities between October 29, 2015 and January 20, 2017, for alleged violations of the Securities Exchange Act of 1934 by Banc’s officers and directors. Banc operates as the bank holding company for Banc of California, National Association that provides banking products and services in the United States.
Banc Accused of Downplaying Ties to Jason Galanis
According to the complaint, Banc submitted a series of filings with the U.S. Securities and Exchange Commission (“SEC”) touting the company’s strong core deposit growth, accelerating loan originations, and impressive return on assets. Banc’s Chief Executive Officer, Steven A. Sugarman, stated, “Combining these returns with our industry leading growth continues to yield significant value creation for shareholders.” However, the complaint alleges that Banc officials failed to disclose that the company had extensive ties to Jason Galanis, which created substantial regulatory risk, and that a revelation of Galanis’s ties to the company could cause a substantial decline in the price of Banc’s securities. In addition, Banc officials allegedly failed to inform investors that the company’s communications to investors regarding a Seeking Alpha investigation was misleading.
On October 18, 2016, Seeking Alpha published a report alleging that Banc’s senior-most officers and board members had ties to Galanis, who the article claimed has a “long history of secretly gaining control of banks and public companies via front men, looting assets, and leaving unsuspecting investors and taxpayers with hundreds of millions in losses.” Among other ties, the article alleged that Galanis controlled COR Capital, Banc’s founding shareholder, that Banc’s lead “independent” director had strong ties to Galanis, and that as a result, Seeking Alpha believed Banc is “simply un-investible.” That same day, Banc responded to the allegations in the Seeking Alpha article, stating that Galanis’s claims to be affiliated with COR Capital were fraudulent. On January 23, 2017, Banc revealed that the SEC had opened an investigation into whether the company had misled investors in its response to the October 2016 Seeking Alpha report, and further disclosed that Sugarman was resigning. On this news, Banc’s stock fell $1.50 per share, or nearly 10%, to close at $14.65 per share on January 23, 2017.
Banc Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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