Banc of California in Irvine has delayed filing its third-quarter 10-Q as it continues to probe purported improper transactions that may have involved directors and senior executives.
The company said Thursday that it intends to file the report "as soon as practicable."
Last month, the $11.2 billion-asset Banc of California announced it had retained the Chicago law firm Winston & Strawn to conduct and independent investigation into the allegations, which surfaced Oct. 18 when an anonymous individual posted a report on the website Seeking Alpha alleging contacts between company officials and Jason Galanis.
In May, Preet Bharara, U.S attorney for the Southern District of New York, charged Galanis and several associates with defrauding investors and an Oglala Sioux tribal entity in connection with bonds issued by the tribal organization. Galanis and his associates allegedly sold the bonds and pocketed the proceeds.
In September 2015, Galanis, his father John, brothers Derek and Jared and several other associates were charged with stock fraud by the Securities and Exchange Commission. The SEC claimed the group secretly issued and sold $72 million worth of shares in Gerova Financial Group Ltd., again pocketing the proceeds.
On Oct. 19, Banc of California reported third-quarter earnings totaling $30.8 million. In a conference call, John Grosvenor, the company's general counsel, said allegations of improper contacts between Galanis and company officials first surfaced last year and were investigated and found to be groundless.
Banc of California's shares were trading at $13.90 midday Friday. The shares plunged after the allegations surfaced on Seeking Alpha, and though they have rebounded slightly they are still trading at 40% below their 32-week high.
