According to a press release dated October 23, 2010, the action alleges that during the Class Period the defendants violated the federal securities laws by engaging in improper behavior and by issuing materially false and misleading statements regarding PrivateBancorp's business and financial results that harmed the Company's investors. Specifically, the complaint alleges that the defendants misrepresented the Company's Strategic Growth and Transformation Plan (the "Growth Plan") which led PrivateBancorp to generate hundreds of millions of dollars in commercial and industrial loans that were high risk, and that the Company misrepresented the quality of its residential loan portfolio, which was suffering severe deterioration.
As a result of defendants' false statements, PrivateBancorp's stock traded at artificially inflated prices throughout the Class Period. While PrivateBancorp's stock was artificially inflated, the Company conducted two public offerings, resulting in hundreds of millions of dollars in net proceeds to the Company.
Prior to the start of trading on October 26, 2009, PrivateBancorp shocked investors by reporting third quarter 2009 earnings results that fell far short of expectations. Despite having written off in excess of $100 million in bad loans in January 2009, the Company revealed that it held almost $400 million in nonperforming loans as of the third quarter 2009. PrivateBancorp further disclosed that its elevated levels of nonperforming loans were originated under the Growth Plan. In response to the Company's October 26 disclosure, PrivateBancorp stock fell over 37%, dropping from $19.00 per share to $11.98. The action alleges claims under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").
On January 25, 2011, the Honorable William T. Hart appointed State-Boston Retirement System and New Orleans Employees' Retirement System as Lead Plaintiffs, and approved their selection of Labaton Sucharow LLP and Bernstein Litowitz Berger & Grossman LLP as Co-Lead Counsel. All pending actions are now consolidated. On February 18, 2011, the lead plaintiffs filed an Amended Class Action Complaint. The defendants responded by filing motions to dismiss on March 25, 2011.
On July 1, 2011, the defendants filed a motion to dismiss one of the individual defendants. The motion was granted on July 14, 2011. According to the Opinion signed by the Honorable William T. Hart on November 3, 2011, Defendants' motions to dismiss 96 , 98 are granted. Class certification is denied without prejudice. The Clerk of the Court is directed to enter judgment in favor of defendants and against lead plaintiffs dismissing lead plaintiffs' cause of action with prejudice. Judgment was entered on November 7, 2011.