| Sept 29
Sept 29 BBX Capital Corp, a Florida
company once known as BankAtlantic Bancorp, and its ex-chief
executive have won a new trial in a lawsuit by the U.S.
Securities and Exchange Commission accusing them of defrauding
investors before the 2008 financial crisis.
The 11th U.S. Circuit Court of Appeals on Wednesday ruled
that a lower court judge had improperly before a 2014 trial
found ex-CEO Alan Levan's statements on an earnings call related
to the riskiness of its real estate portfolio were false.
The court also said a federal judge in Florida erred in
preventing BBX and Levan from defending themselves against
accounting fraud allegations by showing they had in good faith
relied on auditors.
"Thus, we vacate and remand for a new trial in light of
these errors," the three-judge panel wrote.
BBX on Thursday said it welcomed the ruling, which
overturned $4.55 million in penalties against the company.
The order also overturned $1.3 million in fines against
Levan and a two-year ban on him serving as an officer or
director, which had forced him to resign as CEO of BBX and its
majority owner BFC Financial Corp.
"While the decision leaves open the possibility of a new
trial, it decimates any ability of the SEC to win," BBX counsel
Eugene Stearns said.
An SEC spokeswoman declined comment.
The case, filed in 2012, arose from BankAtlantic loans made
on large tracts of land intended for the development of
single-family homes and condominiums. Florida was among the U.S.
states hardest hit by the nation's housing crisis.
The SEC contended BankAtlantic and Levan made misleading
statements to investors to hide the deterioration of its real
estate portfolio in 2007.
The SEC also contended the company and Levan committed
accounting fraud by scheming to minimize BankAtlantic's losses.
BankAtlantic was renamed BBX after selling its main banking
assets in 2012 to North Carolina's BB&T Corp.
The defendants denied wrongdoing. Levan in a statement on
Thursday said he was "determined to clear my name and BBX's name
from the false claims that have been asserted in this case."
The case is Securities and Exchange Commission v
BankAtlantic Bancorp Inc et al, 11th U.S. Circuit Court of
Appeals, No. 15-14629.
(Reporting by Nate Raymond in New York; Editing by Meredith