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U.S. SEC loses retrial in Florida bank case
May 8, 2017 / 7:47 PM / 6 months ago

U.S. SEC loses retrial in Florida bank case

(Reuters) - A federal jury on Monday cleared a Florida bank and its former chief executive of U.S. Securities and Exchange Commission charges that they downplayed real estate lending risks prior to the global financial crisis.

Jurors in Miami found BBX Capital Corp (BBX.N), a Florida company once known as BankAtlantic Bancorp, and former Chief Executive Alan Levan not liable on all counts in the civil case, including improper accounting, court records showed.

The SEC had accused BankAtlantic and Levan of making misleading statements in a July 2007 conference call to hide deterioration in the bank’s commercial real estate portfolio.

Its lawsuit, filed in January 2012, arose from loans that BankAtlantic had made on large tracts of land intended for the construction of single-family homes and condominiums.

Florida was among the U.S. states hardest hit by the nation’s housing crisis.

Both defendants had denied wrongdoing.

Levan, in a statement provided by BBX, accused the SEC of bringing the case so it “could say it did something to somebody other than watch the banking system collapse under its nose.”

An SEC spokesman did not immediately respond to requests for comment.

A different jury had in December 2014 found both defendants liable, and they were later fined a combined $5.85 million by U.S. District Judge Darrin Gayles.

But the federal appeals court in Atlanta threw out the verdict and fines last September, citing errors by the judge.

Gayles presided over the retrial, which began six weeks ago. Jurors began deliberating on Friday.

BankAtlantic was renamed BBX after selling its main banking assets in 2012 to North Carolina’s BB&T Corp (BBT.N).

The case is SEC v BankAtlantic Bancorp Inc et al, U.S. District Court, Southern District of Florida, No. 12-60082.

Reporting by Jonathan Stempel in New York; Editing by Tom Brown

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