<p> </p> <p>According to a press release dated October 29, 2007, the Complaint alleges that BankAtlantic, and certain of its officers and directors, violated the Securities Exchange Act of 1934. At the start of the Class Period, BankAtlantic touted its ‘negative provision for loan losses.’ Nevertheless, BankAtlantic materially understated reserves for real estate loan losses on its financial statements, and thus materially overstated net income. BankAtlantic gave a $27.8 million real estate loan without obtaining an independent appraisal of the real estate. The loan was granted to Michael Tringali, who worked together with Neil Mohamed Husani. The two men inflated land values and then flipped a series of properties in Florida to obtain higher real estate loans from several banks, including BankAtlantic. Husani and Tringali have been under FBI investigation for this scheme, which the Company either knew at the time or recklessly ignored.</p>
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<p>The complaint further alleges that BankAtlantic knew or recklessly ignored that the collateral underlying this $27.8 million loan - vacant land in Manatee County, Florida - was worth no more than $17.1 million. BankAtlantic deflected questions about the adequacy of its loan loss reserves for this property. BankAtlantic said it commissioned an ‘appraisal’ of the property, but real estate experts questioned whether this appraisal had any basis. In April 2007, BankAtlantic announced that it was having difficulty with its Florida real estate portfolio but hid the true extent of the inadequacy of its loan loss reserves. On October 25, 2007, the Company announced that it had to increase its loan loss reserves substantially. The news sent BankAtlantic’s shares down nearly 40%, from $7.45 to $4.72 on heavy trading volumes.</p>
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<p>Similar, purported class action complaints have also been filed in the U.S. District Court for the Southern District of New York.</p>
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