Shares of Santa Ana, Calif.-based Banc of California Inc. fell 2.76% to $21.15 on high volume after a lawsuit surfaced alleging that the company doctored its profits and had a culture of sexual harassment.
The lawsuit, filed by former managing director Heather Endresen, claimed that J. Francisco Turner, the bank's interim CFO from September 2016 to June 2017, pressured female employees to have sex with him. She also alleges that he used illicit drugs at the office and pressured employees to do so. The lawsuit also accuses the company of improperly carrying over revenues from 2016 due to the reversal of accrued bonuses, which inflated its profitability.
Excerpts of the lawsuit were tweeted on Dec. 8 by short seller Aurelius Value, who in 2016 notably accused the company's former executive Steven Sugarman of having ties with fraudster Jason Galanis.
In a statement, Banc of California said the complaint is without merit and plans on defending itself.
"[W]e treat all matters of compliance with the utmost seriousness and any suggestion otherwise is categorically wrong," the company said.
Wells Fargo & Co. faced some headlines as well. Early in the day, President Donald Trump launched a tweet in which he promised penalties against Wells Fargo Bank NA for "bad acts against their customers." Rumors had surfaced earlier that Trump's pick to temporarily lead the Consumer Financial Protection Bureau, Mick Mulvaney, was reviewing a pending settlement related to Wells Fargo's mortgage rate lock extension fees.
Wells Fargo declined to comment on the matter. Shares of the company ticked down 0.08% to $59.31.
Bank stocks broadly fared well in trading Dec. 8 as markets moved up following new jobs numbers. The Labor Department released new figures showing U.S. nonfarm payroll employment rising by 228,000 jobs in November, above the consensus estimate of 190,000. The unemployment rate, meanwhile, remained unchanged at 4.1%, in line with expectations.
At the closing bell, the Dow Jones Industrial Average was up 0.49% to 24,329.16, the S&P 500 had added 0.55% to 2,651.50 and the Nasdaq Composite Index had risen 0.40% to 6,840.08.
The other large banks all rose in trading, as JPMorgan Chase & Co. added 1.25% to $105.93, Bank of America Corp. increased 0.94% to $29.05 and Citigroup Inc. rose 0.97% to $75.71.
In other notable movers, Fort Lauderdale, Fla.-based OptimumBank Holdings Inc. surged 7.24% to $4.89 and New York-based Metropolitan Bank Holding Corp. increased 2.72% to $47.26. Shares of Fresno, Calif.-based Central Valley Community Bancorp fell 5.97% to $19.36.
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