Dec 7, 2017 | Securities Class Action Archive
On December 1, 2017, Aurelius Value published a report (“Eagle Bancorp’s Insider Loan Scheme Exposed”) stating that it Aurelius Value had “. . . uncovered evidence of an insider loan scheme involving [Eagle Bancorp’s] CEO and certain Board Members that [Aurelius Value] believe[s] jeopardizes the safety and soundness of the bank while potentially leading to severe regulatory penalties. In [Aurelius Value’s] opinion, insiders treat Eagle [Bancorp] as their own private piggy bank.”
According to Aurelius Value’s report:
Eagle Bancorp is a Maryland headquartered regional bank earning outsized yields by primarily making commercial real estate and development loans. Many investors appear to believe that Eagle [Bancorp] offers robust growth with minimal risk, a narrative that underpins the stock’s surge to all-time highs and a $2.3 [b]illion market capitalization. But Aurelius Value’s research has uncovered a pattern of conduct that [it] believe[s] is hauntingly similar to the characteristics that have preceded previous bank failures:
- Large Insider loans that finance the CEO’s companies but haven’t been disclosed.
- Fraud accusations that favorable loans are used to enrich the CEO and certain Board Members.
- Undisclosed financial entanglements between largest borrowers and the CEO
- Indications that loans to companies owned by insiders are distressed.
- Compromised and conflicted Board oversight.
- Large recent Insider stock sales.
Eagle’s Chairman and CEO, Ronald D. Paul, has used Eagle [Bancorp] to issue large preferential loans in exchange for being personally awarded cheap equity stakes in Eagle borrowers, according to undisclosed fraud suits filed by the founders of two businesses co-owned by Paul. Documents show that Paul even extracted a $35 million deferred loan origination fee for himself in a transaction that simultaneously included Eagle [Bancorp] modifying the borrower’s loan. An email sent from the private accounts of Paul and Eagle’s General counsel asks for the founder of a different borrower co-owned by Paul to sign retroactive documents that are allegedly used by Paul to cover up his self-dealing from Federal Reserve examiners.
On this news, Eagle Bancorp’s (NASDAQ: EGBN) share price fell $16.20, or 24.49%, to close at $49.95 on December 1, 2017.
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Dec 7, 2017 | Consumer Protection, Employment & Technology Archive
INC Research Holdings, Inc.
A class action lawsuit was filed against INC Research (INCR changed to SYNH on Jan. 8, 2018) and certain of its officers related to alleged violations of federal securities laws. INC, a clinical research company that provides Phase I-IV clinical development services to pharmaceutical, biotechnology, and medical device companies, announced on August 1, 2017, that it completed a merger with inVentiv Health, Inc. and represented that the merger “marks the beginning of an industry-changing company, purpose-built to achieve the singular goal of accelerating biopharmaceutical performance.”
The INC Research press release regarding the INC Research and inVentiv Health merger can be viewed by clicking INC Research & inVentiv Health Merger News.
On November 9, 2017, the first quarter after the merger, INC reported a net loss of $88.9 million, as well as an impairment charge to the INC Research trademark and intangible asset. According to INC Research:
For the three and nine months ended September 30, 2017, we generated a loss from operations of $88.9 million and $43.9 million, respectively, compared to income from operations of $39.4 million and $111.6 million for the three and nine months ended September 30, 2016, respectively. Our operating results for the three and nine months ended September 30, 2017 were impacted by (i) Merger-related transaction expenses of $84.3 million and $108.1 million, respectively, (ii) an impairment charge of $30.0 million recorded in the third quarter of 2017 with respect to the INC Research trademark and intangible asset, and (iii) an increase in amortization expense of $41.9 million in both periods due to the acquisition of intangible assets as a result of the Merger.
The INC Research/inVentiv Health press release regarding Q3 2017 results can be viewed by clicking INC Research_inVentiv Health Q3 2017 Results.
Reportedly, analysts noted that INC Research Holdings’ fourth quarter guidance was “worrisome” given the challenges that inVentiv’s business faced.
On this news, the stock price of INC Research fell $16.35 per share, or 28.4%, to close at $41.15 per share on November 9, 2017, on unusually heavy trading volume. Further, the share price of INC Research declined over the next three trading sessions, closing on November 14, 2017 at $34.35 per share, a total decline of $23.15 per share, or 40.3%.
What Can Investors Do?
If you purchased INC Research common stock between May 10, 2017 and November 9, 2017 and would like to speak privately with a securities attorney to contribute to or learn more about the investigation, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected] or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Dec 1, 2017 | Consumer Protection, Employment & Technology Archive
Triangle Capital – Class Action Lawsuit Filed
A class action lawsuit has been filed against Triangle Capital Corporation (“Triangle Capital”) (NYSE:TCAP) and certain of its officers in United States District Court, Southern District of New York, on behalf of investors who purchased or otherwise acquired Triangle Capital’s securities between May 7, 2014 and November 1, 2017, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against Triangle Capital and certain of its executives.
Triangle Capital is “a publicly-traded, internally managed business development company” that “offer[s] a wide variety of investment structures, with a primary focus on junior capital – debt and equity, for lower middle market companies.”
The class action complaint alleges that during the Class Period, Triangle Capital Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Defendants allegedly made false and/or misleading statements and/or failed to disclose that:
(i) as early as 2013, Triangle Capital’s investment professionals had internally recommended moving away from mezzanine loan deals due to changes in the market that no longer made these investments attractive risk-reward opportunities; (ii) Triangle Capital’s former Chief Executive Officer, Garland S. Tucker, III, ignored the advice of Triangle Capital’s investment professionals to chase higher short-term yields by causing Triangle Capital to invest in mezzanine debt despite the poor quality of the loans and their increased risk of defaults and nonaccruals; (iii) Triangle Capital’s entire vintage of 2014 and 2015 investments were at substantial risk of non-accrual as a result of the poor quality of the investments and deficient underwriting practices in place at the time of the investments; (iv) more than 13% of Triangle Capital’s investment portfolio at cost was at risk of non-accrual and, thus, the fair value of Triangle Capital’s asset portfolio was artificially inflated; (v) Triangle Capital had materially understated the number of loans performing below expectations and/or in non-accrual and had delayed writing down impaired investments; (vi) Triangle Capital failed to implement effective underwriting policies and practices to ensure it received appropriate risk-adjusted returns on its investments; and (vii) as a result of the foregoing, during the Class Period, Triangle Capital’s shares traded at artificially inflated prices and class members suffered significant losses and damages.
On November 1, 2017, Triangle Capital issued a press release announcing its financial results for the quarter ended September 30, 2017. While discussing Triangle Capital’s results, Triangle Capital’s CEO said the following:
The third quarter was a challenging quarter for Triangle as we experienced meaningful unrealized depreciation associated with certain assets which previously had been valued below cost. Our origination platform continues to find investment opportunities which are more senior-oriented in nature; however, certain legacy investments, predominantly associated with investment vintages 2014 and 2015, are under-performing from a credit perspective. As we take aggressive action to move through these legacy investments as quickly as possible, our Board has lowered our quarterly dividend to $0.30 per share. In addition, as we continue to transition our investment portfolio from historic mezzanine-centric investments to more secure, senior-oriented investments, our Board of Directors has elected to pursue the exploration of certain strategic alternatives, including the potential sale of certain investments, the potential benefit of partnering with another organization to accelerate our corporate initiatives, as well as other alternatives. Our Board is engaged in discussions with several investment banking firms and expects to announce the formal engagement of an advisor in the near future.
The press release (which can be viewed by clicking TCAP_Press Release_11.01.2017) also stated that:
[t]otal investment income during the third quarter of 2017 was $29.9 million, compared to total investment income of $31.2 million for the second quarter of 2017. The decrease in quarter-over-quarter total investment income resulted primarily from a $2.1 million decrease in investment income relating to non-accrual assets partially offset by a $0.6 million increase in quarter-over-quarter non-recurring dividend and fee income. Non-recurring dividend and fee income was $2.1 million in the third quarter of 2017 as compared to $1.5 million during the second quarter of 2017.
Net investment income during the third quarter of 2017 was $17.2 million, compared to net investment income of $19.4 million for the second quarter of 2017. Net investment income per share during the third quarter of 2017 was $0.36, based on weighted average shares outstanding during the quarter of 47.7 million, compared to $0.41 per share during the second quarter of 2017, based on weighted average shares outstanding of 47.7 million.
The Company’s net decrease in net assets resulting from operations was $57.5 million during the third quarter of 2017, compared to a net decrease in net assets resulting from operations of $2.0 million during the second quarter of 2017. The Company’s net decrease in net assets resulting from operations was $1.20 per share during the third quarter of 2017, compared to a decrease of $0.04 per share during the second quarter of 2017.
The Company’s net asset value, or NAV, at September 30, 2017, was $13.20 per share as compared to $14.83 per share at June 30, 2017 and $15.13 per share at December 31, 2016. As of September 30, 2017, the Company’s weighted average yield on its outstanding, currently yielding debt investments was approximately 11.2%.
Following these disclosures, Triangle Capital’s share price fell $2.57, or 20.98%, to close at $9.68 on November 2, 2017.
Have You Purchased or Acquired Triangle Capital Shares?
If you purchased or otherwise acquired Triangle Capital shares and would like to speak privately with a securities attorney to learn whether you may have legal claims, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected] or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Nov 30, 2017 | Securities Class Action Archive
SCANA (NYSE: SCG) – SEC Investigation
On October 17, 2017, the Charlotte Business Journal reported that the U.S. Securities and Exchange Commission is investigating SCANA’s “handling of the shuttered V.C. Summer nuclear expansion project.”
According to the story, “SCANA announced . . . it has received a document subpoena from the commission. The announcement contains no detail about what documents are requested beyond saying they are [‘]in connection with an investigation they are conducting relating to the new nuclear project at V. C. Summer Nuclear Station[’].”
SCANA Multibillion Nuclear Project Abandoned & Class-Action Lawsuits
The Charlotte Business Journal further reported that
SCANA subsidiary S.C. Electric & Gas owns 55% of the abandoned project to build two 1,117-megawatt nuclear reactors at the existing V.C. Summer Nuclear Station. State-owned utility Santee Cooper owns the remaining 45%.
The expansion was initially projected to cost about $9 billion to complete. It had already cost that much when SCANA and Santee Cooper abandoned the project in July after designer and principal contractor Westinghouse Electric Co. filed bankruptcy. The companies estimated that the cost to complete the project had risen to more than $18 billion, and some estimates of the final price tag at more than $20 billion.
While there is no direct indication what the SEC is investigating, SCANA . . . faces two class-action lawsuits in federal courts alleging violations of U.S. securities law.
. . .
Shareholders have accused the company and some top executives of making misleading and fraudulent statements to investors and the public about the project. Both suits cite repeated instances of the company issuing financial reports or executives answering questions while intentionally withholding information they had that indicated that the project was in serious trouble.
The suits focus on reassuring comments made to investors after SCANA had received a highly critical February 2016 report from consultant Bechtel Corp. that questioned whether Westinghouse had the necessary knowledge and resources to complete the project.
SCANA – South Carolina Attorney General & Others Request Criminal Investigation
On September 26, 2017, The Charlotte Business Journal reported that
South Carolina has started a criminal investigation into the shuttered V.C. Summer nuclear expansion project, asking the State Law Enforcement Division for agents to probe possible violations of state law.
SCANA Corp. filed notice of the investigation with the U.S. Securities and Exchange Commission Tuesday, saying, “The South Carolina Attorney General’s Office, the Speaker of the South Carolina House of Representatives, and … (other legislative leaders) have requested the South Carolina Law Enforcement Division (SLED) to conduct a criminal investigation.” The filing goes on to say “SCANA … intend(s) to fully cooperate with any potential government investigation of the project.”
The state probe follows hard on the public acknowledgment of an FBI investigation into possible federal crimes. That probe includes grand jury subpoenas issued to SCANA . . . and Santee Cooper for thousands of documents concerning the abandoned nuclear project.
What SCANA Shareholders Can Do?
If you purchased or otherwise acquired SCANA shares and would like to speak privately with a securities attorney to determine whether you may have legal claims against SCANA or SCANA’s directors and officers, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected] or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Nov 29, 2017 | Consumer Protection, Employment & Technology Archive
Checkers – Telephone Consumer Protection Act (“TCPA”) Class Action Lawsuit Filed
Lexology recently reported that fast food chain Checkers Drive-In Restaurants, Inc. (“Checkers”) and its affiliate mobile marketer were sued in federal district court for alleged violations of the TCPA.
According to Lexology:
Checkers operates more than 850 Checkers and Rally’s drive-thru restaurants in 29 states and the District of Columbia. As an advertising vehicle for its fast food products, Checkers works with marketing affiliates to offer digital coupons and other promotions to prospective and existing customers. Some such promotions offer coupon codes for free Checkers[‘] or Rally’s menu items to consumers who use their mobile phones to text a specific keyword to a designated five-digit short code.
Louisiana resident Toby Branden, presumably enticed by a Checkers coupon offer, texted “Coupons” and “70117” to a Checkers mobile marketing short code. Branden alleges that mobile marketer Vibes Media, LLC (“Vibes”) subsequently delivered multiple advertising text messages to her mobile phone number on Checkers’ behalf.
Further, Lexology reported that
[o]n November 3, 2017, Branden filed a putative class action text message lawsuit against both Checkers and Vibes in the U.S. District Court for the Northern District of Illinois . . . on behalf of all cell phone users who received unauthorized text messages from Checkers or Vibes.
The complaint alleges that Checkers and Vibes violated the TCPA by sending commercial text messages to consumers without obtaining each recipient’s prior express written consent to receive such messages. Braden’s text message lawsuit claims that the Defendants texted thousands of consumers nationwide, and seeks damages of $500 to $1,500 per text message delivered.
Have You Received Unwanted, Unsolicited or Harassing Telephone, Telemarketing, Autodial or Robocalls or Text Messages?
If you have received unwanted, unsolicited or harassing telephone, telemarketing, autodial or robocalls or text messages and would like to speak privately with an attorney to learn more about your potential legal rights, please complete the form to the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, negligence, false claims, deception, data breaches or whose rights to minimum wage and overtime compensation under the federal Fair Labor Standards Act and state wage and hour laws have been violated.
