Jury Finds BankAtlantic Bancorp and CEO Guilty of Securities Fraud

After a six-week trial, a jury in federal court in Miami found that BankAtlantic Bancorp, Inc. (now known as BBX Capital Corporation) and its CEO committed securities fraud in connection with BankAtlantic's public disclosures and financial statements.

The jury found that, in 2007, statements from BankAtlantic's second quarter earnings fraudulently misled investors regarding the financial health of the bank. Additionally, the jury found that BankAtlantic's 2007 annual report fraudulently understated the Bank's loss for that year by approximately $53 million.

The verdict came after the SEC issued a complaint alleging that BankAtlantic and its CEO knew that a large portion of the loan portfolio was deteriorating in early 2007 because many of the loans required extensions due to the borrowers' inability to meet their loan obligations. The SEC also found that some loans were kept current only by the firm's extension of the loan terms or replenishment of the interest reserves from an increase in the loan principal.