Robbins LLP: Opus Bank (OPB) Misled Shareholders According to a Recently Filed Lawsuit
Robbins LLP announces that a shareholder derivative lawsuit was filed on behalf of Opus Bank (NASDAQGS: OPB) in the Superior Court of the State of California, County of Los Angeles. The complaint is brought against certain officers and directors of the company for alleged breach of fiduciary duties, unjust enrichment, gross mismanagement, abuse of control, and waste of corporate assets. Opus provides various banking products, services, and solutions for small to mid-sized companies, entrepreneurs, real estate investors, professionals, and high net worth individuals.
Opus Accused of Lying About the Quality of Its Loans
According to the complaint, Opus submitted several filings with the U.S. Securities and Exchange Commission touting positive financial results. In particular, Opus emphasized its strong growth, improving profitability, and record new loan fundings that were accelerating beyond the company’s expectations. However, the complaint alleges that Opus officials failed to disclose that: (1) certain of the company’s loans were of poor quality; (2) the company failed to properly account for the loans in violation of Generally Accepted Accounting Principles; (3) as a result, the company would be forced to recognize large charge-offs associated with the loans; and (4) the company lacked adequate internal controls over accounting and financial reporting.
On October 17, 2016, Opus issued a press release announcing that earnings for the third quarter of 2016 would be negatively affected by a $0.59 per diluted share impact from loan charge-offs and is expected to result in a net loss of approximately $0.05 per diluted share for the third quarter of 2016. The company further revealed that charge-offs totaled $38.8 million and had specific reserves of $16.7 million previously recorded. On this news, Opus’s stock price fell 21% to close at $27.20 per share on October 17, 2016. After Opus held a conference call with investors on October 24, 2016, its stock subsequently fell another $7.10 per share, or approximately 27%, to close at $20.10 per share on October 26, 2016.
Opus 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.