Robbins LLP: First NBC Bank Holding Company (FNBC) Misled Shareholders According to a Recently Filed Lawsuit
Robbins LLP announces that a lawsuit was filed on behalf of First NBC Bank Holding Company (NASDAQGS: FNBC) (“First NBC”) in the U.S. District Court for the Eastern District of Louisiana. The complaint is brought for alleged violations of the Securities Exchange Act of 1934 by First NBC officers and directors from May 10, 2013 to the present. First NBC operates as the bank holding company for its subsidiary First NBC Bank that provides a range of financial services for businesses, institutions, and individuals.
First NBC Accused of Exposing the Company to Unnecessary Risk
According to the complaint, First NBC officials increased the company’s exposure to federal and state tax-credit investments, which in turn made it vulnerable to enormous risks. The risks included underlying collateral that was illiquid, had to be held over many years, and over which the company had no economic, voting, or managerial control. In particular, the company deliberately chose real estate loan investments that would allow the lender to reduce its income tax obligations by a certain amount. The complaint further alleges that First NBC failed to disclose that it had a larger exposure to the oil and gas industry than it had led investors to believe, that it lacked effective internal and reporting controls, and that its financial statements in its public filings had not been prepared in accordance with Generally Accepted Accounting Principles. As a result, the company allegedly misstated and withheld material information from its shareholders, causing its stock to trade at artificially inflated levels.
Since the truth began to emerge in early 2016, First NBC has been required to restate its financials from 2011 through 2015. On February 1, 2016, First NBC disclosed that its earnings for the fourth quarter of 2015 and fiscal 2015 had significantly underperformed analysts’ expectations, based in substantial part on First NBC having to book an $8.2 million tax credit impairment. Further, several of the company’s financial statements that it filed with the U.S. Securities and Exchange Commission were delayed, forcing the Nasdaq national market to send suspension and de-listing notices to the company. Notably, First NBC’s primary regulators have investigated the company and compelled it to enter into a consent order requiring it to initiate remediation plans for nearly every aspect of its management, finance, and accounting functions. The company is also the subject of a federal securities class action. The revelations of the company’s misconduct have caused First NBC’s stock to decline by 80%, from a high of $42.19 per share in November 2015 to close at $7.20 per share on December 20, 2016.
First NBC Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.