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Home>Haeggquist & Eck Investigates Breach of Fiduciary Duty and Self-Dealing by Banc of California Directors

Haeggquist & Eck Investigates Breach of Fiduciary Duty and Self-Dealing by Banc of California Directors

Haeggquist & Eck Investigates Breach of Fiduciary Duty and Self-Dealing by Banc of California Directors

09/30/2017

Haeggquist & Eck Investigates Breach of Fiduciary Duty and Self-Dealing by Banc of California Directors

Haeggquist & Eck, LLP, a leading shareholder rights litigation firm, announces that a shareholder derivative lawsuit was filed this week against certain directors of Banc of California, Inc. (“Banc” or the “Company”) (NYSE: BANC) alleging breach of their fiduciary duties. Banc provides commercial banking and home lending services in California.

On October 18, 2016, a blog post on Seeking Alpha alleged improper relationships between Jason Galanis, a Los Angeles financier and convicted securities fraudster, and the Company’s senior managers, including Steven Sugarman, Banc’s CEO, and Chad Brownstein, Banc’s Lead Independent Director.

The same day, Banc issued a press release responding to the Seeking Alpha post, stating that Galanis’s claims that he was affiliated with COR Capital were fraudulent.

On January 23, 2017, Banc revealed that the SEC was investigating whether Banc had misled investors in its response to the Seeking Alpha report, and disclosed that its CEO Sugarman was resigning.

The derivative complaint, filed September 26, 2017 in the Central District of California, alleges that: (1) defendants authorized or failed to correct the Company’s false October 18, 2016 press release, directly resulting in the SEC investigation; (2) the Special Committee was composed of conflicted directors motivated to take control of the Company, which further jeopardized the Company’s operations; and (3) Banc engaged in accounting gimmicks with the knowledge of the Audit Committee, designed to inflate Banc’s results for the first quarter of 2017.

On September 6, 2017, the federal court in the securities class action upheld allegations of securities fraud against Banc, including allegations that Banc made false and misleading statements regarding issues related to the Seeking Alpha report.

Banc of California Shareholders Have Legal Options

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