Violations of the 1934 Securities Exchange Act Are Cited in the Bankcorp South Class Action

BankcorpSouth Inc has been named in a current class action lawsuit involving alleged violation of the Securities Exchange Act of 1934.  Bankcorp South is a financial holding company publicly traded on the stock exchange and is therefore bound by certain accounting and financial reporting rules.  These rules are summarized by the Generally Accepted  Accounting Practices (GAPP) and litigated according to the 1934 Act.

The current Bankcorp class action alleges that Bankcorp Inc violated the Securities Exchange Act of 1934 and failed to follow the Generally Accepted Accounting Practices when it failed to reveal detrimental information about its finances to its investors.  Those who purchased stock between July 23, 2009 and February 25, 2010 are eligible to join the current BankcorpSouth class action.

Specifically, it is alleged that BankcorpSouth did not disclose to investors problematic loans in the areas of construction, land, and commercial real estate.  Therefore, when the company had to drastically alter its net income from the original outlook for the year and quarter ending December 31, 2009, stock in the company fell over 13% on high volume in one day.

The failure  to disclose the bad credit situation was allegedly intentional, and was harmful to investors.  The company is also cited with failing to uphold necessary level of internal controls as well as failure to comply with GAAP when issuing its financial reports, the key tool used by investors to make decisions about buying stock.

If you have lost money as a result of reporting fraud from a corporation in which you hold stock, then you can become part of one of many securities class action lawsuits happening across the country.

If a corporation misrepresents their financial results or even their expectations, they are committing a crime against the Securities Act of 1933.  In 2008, securities class action lawsuits against financial institutions soared.  In fact, almost one third of all large financial firms in the country were a named defendant in a securities class action lawsuit that year.

Securities Class Action Lawsuits can be divided into three major types of offenses:

1. broker fraud
2. shareholder derivative lawsuits
3. accounting fraud

Broker Fraud

If a corporation propped up their stock by disseminating false good news or other techniques, or increased optimistic expectations about their stock value, this is broker fraud.

Accounting Fraud

If the company intentionally misleads regulators and/or their shareholders about the financial activities, this is accounting fraud.

Shareholder Derivative Lawsuits

If the company hid important information from shareholders, or if mismanagement caused harm to shareholder’s share value, this is ground for shareholder derivative lawsuits.

The class action lawsuit states that Carter’s lacked certain internal controls and therefore misreported their finances, causing consumer to purchase securities based on false information.   They understated income in violation of GAAP conventions.   All financial reports from this period were false and misleading.  Therefore, any securities purchases during this time qualify purchasers to include themselves in the Securities Class Action against Carter’s.    If you purchased stock during the roughly five year period stated above, you can contact the law firm in charge of this Securities class action lawsuit at 651- 633-5685 in Minnesota.