New York Community Bancorp Faces Class Action
Sued this week by shareholders due to commercial real estate losses sending the stock down by more than 50%
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- Written by Banking Exchange staff
New York Community Bancorp was sued this week by shareholders due to commercial real estate losses sending the stock down by more than 50%.
Commercial real estate holdings have been and will continue to be a problem for banks and institutional investors. Shareholders claim that the bank did not disclose the need to have more cash and thus cut its dividend.
Essentially, the suit claimed that the company misled them through positive assessments on financial guidance that was, in their estimation, clearly inaccurate.
The bank is based in Hicksville, New York and has several hundred branches. Its fourth quarter loss stunned Wall Street last week reporting more than $260 million in losses in a single quarter. In response, the banks announced a major dividend cut. The bank took over Signature Bank about one year ago, only to find its own problems due to commercial real estate.
Stubborn interest rates have also hurt companies exposed to the result of low occupancy banks and institutions are not able to refinance debt and thus need to hold cash rather than pay dividends.
Tagged under Compliance, Duties, Compliance/Regulatory, Feature3, Feature,
