Banc of California Inc. agreed to pay $19.8 million through its insurance carriers to settle various class-action suits alleging it did not disclose its management had ties with convicted securities fraudster Jason Galanis.
The amount will be distributed to shareholders who purchased common shares between April 15, 2016, and Jan. 20, 2017. The Santa Ana, Calif.-based bank said the claims are without merit, but it said settling litigation was in the best interest of shareholders.
The settlement and dismissal of the suits are subject to court approval.
The Iron Workers Local No. 25 Pension Fund recently agreed to dismiss its claims against Steven Sugarman, the former chairman, president and CEO of Banc of California. The plaintiff said it did not find any evidence Galanis had control on Sugarman's actions during his tenure nor in any of his business entities.
An anonymous blogger only known by the pseudonym "Aurelius" alleged Galanis controlled COR Capital, the entity which recapitalized Banc of California, and that the bank's executives had ties with Galanis through off-balance sheet organizations. The blogger also accused Galanis of having an extensive history of plundering banks' assets.
