posted by on Jul 12
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.