Florida Bank Hit With Rare Verdict in Securities-Fraud Trial - Law Blog - WSJ

Florida Bank Hit With Rare Verdict in Securities-Fraud Trial - Law Blog - WSJ: "Miami jury issued a verdict in a securities-fraud suit against BankAtlantic Bancorp. The jury concluded that officers of the Florida bank misrepresented the risks that the bank faced with a 2007 real estate loan portfolio.
The jury further found that some investors who bought stock in in 2007 overpaid by $2.41 per share, according to the winning plaintiffs’ lawyers at Labaton Sucharow. (The plaintiffs were also represented by the Barroway Topaz firm.)
The ruling represents one of the first jury verdicts arising out of the financial crisis and, according to plaintiffs’ lawyers, underscores the potential risks faced by banks that issued mortgages and loans that are now underwater.
In an interview, Labaton partner Mark Arisohn said the verdict could equal “millions” in damages, depending on how many shareholders come forward to claim their share of the winnings. “The verdict means that a federal jury was willing to hold a bank and its management liable for misrepresenting to shareholders the lending risk it was taking,” he said."