Berman Tabacco

BankUnited Financial Corporation

In re BankUnited Securities Litigation, No. 08-cv-22572 (S.D. Fla.)

Berman Tabacco was lead counsel representing the Oklahoma Police Pension and Retirement System and Louisiana Municipal Police Employees’ Retirement System and negotiated a settlement of $3,057,000, likely the maximum possible recovery given the “wasting” nature of defendants’ directors’ and officers’ (“D&O”) liability insurance coverage and competing claims to insurance proceeds from BankUnited’s bankruptcy creditors and federal agencies. The action alleged that BankUnited’s senior executives violated federal securities laws by misrepresenting the company’s financial results, lending practices, accounting for loan losses, and overall financial soundness by concealing the scope of the bank’s reliance on risky “Option ARM” mortgages and loans originated with little, if any, borrower documentation. The alleged fraud was revealed in May 2009, when the Federal Office of Thrift Supervision seized control of BankUnited and placed it under FDIC receivership in what was then the second largest bank failure in history. Plaintiffs’ allegations were substantially confirmed by a subsequent June 2010 U.S. Treasury Department Inspector General report that detailed the causes of BankUnited’s collapse.

Case Information

  • Settlement Amount:
    $3,057,000