BankUnited Financial Corporation ("BankUnited" or the Company) is the holding company for BankUnited, FSB, which provides consumer and commercial banking products and services to consumers and businesses located primarily in Florida.
The Complaint charges BankUnited and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Complaint alleges that during the Class Period, Defendants made false and misleading statements about BankUnited. Specifically, Defendants misrepresented: (a) the losses the Company was likely to suffer due to BankUnited's poor underwriting standards, which losses would occur once interest rates reset on the billions of dollars of pay-option arms (adjustable rate mortgages where borrowers had the ability to choose their payment amount during the initial period of the loan); (b) BankUnited's sketchy appraisal process, which permitted borrowers to obtain mortgages in excess of their ability to pay and in excess of the value of the underlying property; and (c) BankUnited's policies with regard to "piggy-back" loans, which are essentially second mortgages made at the time a home is purchased to fund a down payment. When the truth began to come to light, BankUnited's stock price plunged, damaging innocent investors.
On April 6, 2009, the Court granted the motion to appoint the Police Pension Funds, consisting of the Louisiana Municipal Police Employees’ Retirement System and the Oklahoma Police Pension & Retirement System, as lead Plaintiff and approved lead Plaintiff’s selection of the law firm of Berman DeValerio Pease Tabacco Burt & Pucillo to serve as lead Counsel. All similar actions were consolidated into In re Bank United Securities Litigation, under Master File Case No. 08-CIV-22572 COOKE/BANDSTRA.
On May 27, 2009, BankUnited filed a suggestion of bankruptcy. On June 30, 2009, the Plaintiffs filed a Consolidated Amended Class Action Complaint. On August 28 and 31, 2009, the Defendant filed motions to dismiss the Consolidated Amended Class Action Complaint. On March 30, 2010, Judge Marcia G. Cooke granted the Defendants’ motions to dismiss and the action was dismissed without prejudice. The Plaintiffs then filed a motion for leave to file an amended Complaint.
After mediation, the parties agreed to a settlement in June 2011. On September 30, 2011, a motion for preliminary approval of the settlement and motion to certify the class was filed. According to the Stipulation of Agreement, the terms provide that the Class will recover $3,000,000 in cash in exchange for the release of certain claims, including all claims asserted in the Action against Defendants and, separately, an additional $500,000 under an Assignment of Rights entered into between Plaintiffs and non-party Federal Deposit Insurance Corporation, as receiver for BankUnited, FSB.
