Irvine, Calif.-based Banc of California Inc. Chairman and CEO Steven Sugarman has resigned.
The bank announced Sugarman's resignation as part of an update on its corporate governance policies and its special committee investigation into allegations made by an anonymous blogger. The company said that the SEC has initiated an investigation into some of the allegations, and issued a subpoena Jan. 12.
On Oct. 18, 2016, an anonymous blogger accused several company senior executives and board members of having ties with Jason Galanis, who has been charged with market manipulation and several counts of fraud. The company formed a special committee and hired law firm WilmerHale to conduct an independent investigation. To date, the company said WilmerHale has found no evidence that the company is connected to Galanis.
The company appointed director Robert Sznewajs as its new chairman, Chief Risk Officer Hugh Boyle interim CEO, and Chief Strategy Officer and Principal Officer J. Francisco Turner interim CFO and president. Boyle and Turner will head the interim office of the CEO/president while the board looks for a candidate to fill the vacated post. As part of new corporate governance policies, the company is separating the CEO and chairman roles.
The company's board has also separated its compensation, nominating and corporate governance committee into two separate committees, and the company is developing a "more rigorous policy" regarding proposed related party transactions.
Sznewajs said the special committee has determined that the allegations will not affect its financial conditions.
The special committee did determine, however, that the company's Oct. 18 press release concerning the allegations "contained inaccurate statements."
These include the company "[characterizing] the investigation as 'independent' without disclosing that the law firm conducting the investigation had previously represented both the Company and the Company's CEO individually," and also "[overstating] both the degree to which the Company had been in contact with regulatory agencies about the subject matter referenced in the blog post, as well as the involvement of the directors in oversight or direction of the inquiry."
The company said it expects to file its yearly 10-K report in a timely manner.