Statement on Final Judgment Entered Against BBX Capital Corporation and Alan B. Levan
Director, Division of Enforcement
Sept. 24, 2015
“We are pleased that the judgment holds BBX and Levan accountable for their financial crisis misdeeds, imposes substantial financial penalties on them, and for two years bars Levan from serving as an officer or director of a publicly traded company. We will continue to hold CEOs and other senior executives of public companies accountable, including through trials, if they engage in financial fraud and other violations of the federal securities laws.”
Today the Honorable Darrin P. Gayles of the U.S. District Court for the Southern District of Florida entered a Final Judgment against BBX Capital Corporation, f/k/a BankAtlantic Bancorp, Inc. (BBX), and its CEO Alan Levan. Pursuant to the Final Judgment, BBX and Levan are permanently enjoined from violating or aiding and abetting violations of the antifraud, reporting, books and records, and internal accounting controls provisions of the federal securities laws. Levan is also enjoined from falsifying books and records, lying to accountants, and from violating the certification provisions of the federal securities laws.
Under the terms of the Final Judgment, BBX and Levan are also required to pay civil penalties of $4.55 million and $1.3 million, respectively.
The order also bars Levan from serving as an officer or director of a public company for a period of two years.
On December 15, 2014, a jury found that BBX and Levan committed securities fraud during the financial crisis in connection with BBX’s public disclosures and financial statements related to growing problems in one of BBX’s significant loan portfolios. After a six-week trial in federal court in Miami, Florida, the jury found that Levan’s 2007 statements during BBX’s second quarter earnings conference call fraudulently misled investors regarding the financial health of the bank, that BBX’s 2007 annual report fraudulently understated the Bank’s loss for that year by approximately $53 million, and that Levan and BBX engaged in a course of business that operated as a fraud throughout 2007, in part by attempting to sell some of the deteriorating loans while failing to account for them properly as being “held for sale,” which is required by GAAP.