The news just doesn’t seem to be getting any better for Regions Financial Corp. An Alabama Judge recently filed a shareholder derivative suit in Jefferson County Alabama against the top executives and board of directors of Regions Financial Corp. The suit alleges that the defendants’ mismanagement led to the huge losses suffered by the company and its shareholders.
In the complaint, Judge David N. Lichtenstein alleges that Regions President and CEO C. Dowd Ritter and the board of directors at the bank made decisions that caused the banks stock to drop from $38 in 2007 to approximately $5. According to allegations in the complaint, Dowd and the board of directors misled investors about Regions’ exposure to subprime mortgage assets in press releases and filings with the SEC. The complaint also contains allegations that at the same time the false statements inflated Regions’ stock price, the individual defendants sold more that 60 million of their personal holdings in the bank’s stock.
With the recent notification of a possible investigation by the SEC against Regions Financial Corp.’s brokerage unit, Morgan Keegan & Co., over the alleged improper sale of auction-rate securities and the massive amount of claims filed against Morgan Keegan related to its toxic bond funds, the news seems to continue to get worse for Regions. These developments can’t help Region’s proposed stock offerings seeking to raise $1 billion from common stock sales and another $250 million from the sale of convertible preferred stock.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing institutional and corporate investors in securities cases. For further information, please contact us.