Kehoe Law Firm, P.C. is investigating potential claims against Eagle Bancorp, Inc. (“Eagle Bancorp” or the “Company”) (NASDAQ: EGBN) and certain of the Company’s officers for possible violations of the federal securities laws.
If you purchased, or otherwise acquired, Eagle Bancorp securities between March 2, 2015 and July 17, 2019 and wish to discuss Kehoe Law Firm’s securities investigation, please click Join a Securities Class Action or contact either John Kehoe, Esq., [email protected], (215) 792-6676, Ext. 801, or Michael Yarnoff, Esq., [email protected], (215) 792-6676, Ext. 804, [email protected].
A class action lawsuit was filed against Eagle Bancorp and certain of its officers in United States District Court on behalf of a class of all persons and entities, other than the Defendants, who purchased, or otherwise acquired, Eagle Bancorp securities between March 2, 2015 and July 17, 2019, both dates inclusive (the “Class Period”).
The class action seeks to recover damages caused by the Eagle Bancorp Defendants’ alleged violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against Eagle Bancorp and certain of its officials.
Eagle Bancorp shareholders have until September 23, 2019 to move the Court to be appointed lead plaintiff.
The class action complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding Eagle Bancorp’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Eagle Bancorp’s internal controls and procedures and compliance policies were inadequate; (ii) the foregoing shortcoming created a foreseeable risk of heightened regulatory scrutiny and the need for Eagle Bancorp to undertake its own internal investigations; and (iii) as a result, Eagle Bancorp’s public statements were materially false and misleading at all relevant times.
According to the complaint, on July 17, 2019, Eagle Bancorp disclosed rising legal costs stemming from ongoing internal and government investigations of “the Company’s identification, classification and disclosure of related party transactions; the retirement of certain former officers and directors; and the relationship of the Company and certain of its former officers and directors with a local public official.”
On this news, Eagle Bancorp’s stock price fell $14.30 per share, or 26.75%, to close at $39.15 per share on July 18, 2019.
More specifically, on July 17, 2019, Eagle Bancorp disclosed the following:
During the three month periods ended June 30, 2019 and June 30, 2018, [Eagle Bancorp] incurred legal, accounting and professional fees and expenses of $2.7 million and $2.2 million, respectively, which represented an increase of 26%. For the six month periods ended June 30, 2019 and June 30, 2018, [Eagle Bancorp] incurred legal, accounting and professional fees and expenses of $4.4 million and $5.2 million, respectively, which represented a decrease of 14%. During the three months ended June 30, 2018, these expenses related substantially to [Eagle Bancorp’s] engagement of independent accounting, legal and compliance consultants who conducted various investigations for [Eagle Bancorp], in addition to consulting costs to enhance [Eagle Bancorp’s] governance and risk management systems. During the three months ended June 30, 2019, such expenses related primarily to legal fees and expenditures in connection with [the Company’s] responses to investigations and related document requests and subpoenas from government agencies examining matters, including [Eagle Bancorp’s] identification, classification and disclosure of related party transactions; the retirement of certain former officers and directors; and the relationship of [Eagle Bancorp] and certain of its former officers and directors with a local public official. The Company has D&O insurance that may provide reimbursement for all or part of advancement and indemnification costs requested by current and former officers and directors, and those costs can not be estimated at this time. While [Eagle Bancorp is] unable to estimate the amount of these legal expenditures at this time, the Company expects that it will continue to incur elevated levels of legal and professional fees and expenses for at least the remainder of 2019 as it continues to cooperate with these investigations. [Emphasis added.]
Again, on this news, shares of Eagle Bancorp, the parent company of EagleBank, fell approximately 27% on July 18, 2019, eliminating more than $490 million in market capitalization.