Wake up and good morning. It's not a good week to be a bank doing business in Florida. Several financial institutions and bankers got their fingers burned recently. Here's the tally.
* The Securities and Exchange Commission charged Florida banker Alan B. Levan (photo, right), CEO of BankAtlantic Bancorp., with making misleading statements in public filings and on earnings calls in 2007 in order to hide mounting losses in much of the portfolio, which consisted of loans on large tracts of land intended for real estate development. The SEC complaint also names BankAtlantic Bancorp, the holding company for BankAtlantic, one of Florida's largest banks -- which in November said would be acquired by BB&T. Read more from the New York Times. According to Reuters, Wednesday's civil lawsuit prompted a "combative response" by Levan (never shy to assert his point of view), who said that when the SEC case is over, "the SEC's credibility as a neutral enforcer of securities laws will be tarnished." (Levan and BankAtlantic were featured in a 2010 New York Times article about the company's battle with a Tampa Bay area bank analyst, Richard X. Bove, who works from Lutz for Rochedale Securities. That contest was later settled.)
* AP reports that a federal jury decided Wednesday that TD Bank owed an investment group $67 million for its role in a $1.2 billion Ponzi scheme operated by a former lawyer from -- where else? -- Florida. Scott Rothstein (AP photo, left), once a prominent South Florida lawyer who is now disbarred, is serving a 50-year prison sentence after pleading guilty to running a scheme involving investments in phony legal settlements that imploded in 2009. Rothstein used an account at a TD Bank branch as an integral part of the scheme. Conspirators in his scheme are suspected of posing as TD Bank employees, and one of Rothstein associates devised a mock TD Bank Web site where false account balances were posted for investors. AP says the verdict came in a lawsuit filed by Coquina Investments, based in Corpus Christi, Tex. It's just the first to go to trial of several pending lawsuits filed by wronged investors against the bank and others.
* South Florida's BankUnited, an $11 billion, 90-branch behemoth assembled out of failing local banks (and reaching into the Tampa Bay market) little more than a year ago and backed by private equity firms sure they could make a killing in the Florida banking market, was put for sale. Hopeful sales price: $2 billion. Wow. Two banks, TD Bank (part of Canada's Toronto-Dominion Bank) and BB&T of Winston Salem, N.C., reportedly offered preliminary but apparently disappointing bids. The Wall Street Journal reports that BankUnited's "abruptly abandoned" its sale because the two bids that were lower than expected. Says the Journal: "The reversal is a setback for John Kanas (photo, right), the longtime New York banker who is chief executive of BankUnited, and the big private-equity firms that bought the bank after it collapsed in May 2009... The failed auction is likely to cast a pall over the Florida banking market, which is still reeling from the housing crisis." (Curious: When I call up BankUnited's home page, it shows the Tampa skyline. Clever marketing.)
-- Robert Trigaux, Business Columnist, Tampa Bay Times