A federal jury in Miami on Monday dismissed civil claims against an executive who once operated one of Florida's largest banks, marking the end of a long-running case that turned on allegations of misconduct in the run-up to the housing crisis.
The verdict cleared Alan Levan and BBX Capital Corp., a company that once operated as BankAtlantic Bancorp Inc. before the bank business was sold to BB&T Corp. in 2011. The Securities and Exchange Commission alleged Mr. Levan misled investors during a July 2007 analyst call about trouble in the bank's loan portfolio. The SEC also claimed the bank manipulated how it valued some loans, allowing it report a lower pretax loss for the year. The jury found in favor of Mr. Levan and BBX on both counts.
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Mr. Levan had predicted he would be exonerated after an appellate court last year faulted how a judge handled an earlier trial against him. The 2014 trial ended in a two-year ban on Mr. Levan from serving as an officer or director of a public company. The 11th U.S. Circuit Court of Appeals in Atlanta vacated that outcome and ordered a new trial on the few remaining claims in the SEC's case.
An SEC spokesman said in a statement: "While we are disappointed with the outcome, we respect the jury's verdict."
In an interview, Mr. Levan said he was relieved by the outcome, noting that he had refused to settle the case because he thought he would prevail in court. The bank's auditor, PwC, testified in favor of the accounting treatment for the loans, and the bank's disclosures were shown to be fair and accurate, he said.
The SEC "has to be embarrassed," he said. "I was fighting on principle. Your heart has to go out to all of the people that the SEC forces into settlements because they don't have the financial wherewithal to take them on."
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(END) Dow Jones Newswires
May 08, 2017 17:20 ET (21:20 GMT)