Class Certified in BancorpSouth Securities Class Action
On April 28, 2016, the Honorable Todd J. Campbell of the United States District Court for the Middle District of Tennessee issued an order appointing the City of Palm Beach Gardens Firefighters’ Pension Fund as class representative, and Robbins Geller as class counsel, to represent a class of investors who acquired BancorpSouth, Inc. common stock between February 12, 2014 and July 21, 2014.
The case alleges that BancorpSouth and certain of its officers and directors violated the Securities Exchange Act of 1934 by making false and misleading statements and omissions regarding BancorpSouth’s compliance with Bank Secrecy Act and anti-money laundering regulations, fair lending laws, well as the completion of two mergers whose closings were conditioned on regulatory approval.
Defendants’ fraud was revealed in part when, on July 21, 2014, BancorpSouth issued a press release disclosing that federal bank regulators had identified deficiencies in the company’s compliance programs, including its Bank Secrecy Act and anti-money laundering programs, that the Consumer Financial Protection Bureau was investigating its fair lending practices, and that the contemplated mergers would be indefinitely delayed. On this news, shares of BancorpSouth fell $1.90 per share, or over 8%, on extremely heavy volume, to close at $21.51 per share on July 22, 2014, causing tens of millions of dollars in damages to investors.
BancorpSouth was subsequently forced to enter into a consent order with federal regulators requiring wholesale changes their Bank Secrecy Act and anti-money laundering programs. In addition, the Department of Justice joined the Consumer Financial Protection Bureau’s investigation of the company’s fair lending practices, which continues to this day. Meanwhile, the mergers, which defendants assured investors would close promptly in 2014, have yet to, and may never, close.
Commenting on the court’s order, Robbins Geller partner Chris Wood said: “We are gratified that the court certified the class while rejecting defendants’ frivolous contentions and desperate attacks, moving thousands of investors one step closer to recovering their losses caused by defendants’ misconduct.”
William E. Burges v. BancorpSouth, Inc., Order Granting Lead Plaintiff’s Motion to Certify the Class, Appoint Representative and Appoint Class Counsel, No. 3:14-cv-01564 (M.D. Tenn. Apr. 28, 2016).