SAN DIEGO & HOUSTON--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a purchaser of Cadence Bancorporation (NYSE: CADE) filed a class action complaint for alleged violations of the Securities Exchange Act of 1934 between July 23, 2018 and July 22, 2019. Cadence is a financial holding company that provides commercial banking products and services through its subsidiary.
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Cadence Bancorporation (CADE) Accused of Misleading Shareholders
According to the complaint, throughout the relevant period, Cadence's financial reports demonstrated strong loan growth and overall stable credit. However, Cadence also acknowledged risks associated with managing credit, recognizing that "[its] business depends on [its] ability to successfully manage credit risk" and that potential loan losses exceeding its allowance for credit losses "may adversely affect [its] business." Despite these acknowledgements, Cadence failed to mention that it was experiencing a lack of adequate control to properly assess credit risk. As a result, Cadence's loans likely posed an increased risk of significant loss that would adversely impact the Company. These adverse effects were realized on July 22, 2019, when Cadence disclosed that its second quarter 2019 financial results had been negatively impacted by "higher credit costs including net charge-offs of $18.6 million and loan provisions of $28.9 million." On this news, Cadence's stock price fell $3.75, or 19%, per share to close at $15.86, and has yet to recover.
Cadence Bancorporation (CADE) Shareholders Have Legal Options
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