Securities Fraud at Issue in Complaint by SEC Against BBX Capital

Jury selection started Monday in a Miami federal-court case that the U.S. Securities & Exchange Commission (SEC) filed against BBX Capital Corp. and parent company BFC Financial Corp. The SEC seeks to bar the chairman and CEO of both companies, Alan Levan, from the securities industry, accusing both Levan and BBX of securities fraud. Specifically, the SEC accuses Levan and BBX of making misleading statements to investors and accounting fraud for putting loans up for sale without marking them down to market value based on the resulting offers. The securities fraud and accounting fraud charges stem from Levan’s actions in 2007 and 2008, when the company owned BankAtlantic.

The 2010 Case Against BBX and Levan

A loss in the case would mean that Levan, who is a controlling shareholder of both companies, would be forced out. This is not the first time a case has been brought against BBX and Levan. In 2010, a shareholder class action lawsuit alleging securities fraud for misleading statements went to trial. In that case, the shareholders won a jury verdict after finding that statements made by Levan were false, but the judge overruled the verdict because she didn’t believe the evidence of specific damages was strong enough.

In a shareholder class action lawsuit, the plaintiffs have very high burden of proof to prevail. But the SEC is not saddled with the same requirements. The SEC already received a critical ruling in its favor before jury selection began when the court ruled that certain statements made in 2007 on an investor call were false, which is currently being appealed by BBX.

Who can Help with Securities Fraud?

At Dimond Kaplan & Rothstein Law Firm our objective is to protect your interests, resolve your legal dispute and achieve your goals as quickly and efficiently as possible. We have a broad and in-depth class action experience, particularly in securities fraud, in both state and country. Contact us for a consultation!

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