NEW YORK--(BUSINESS WIRE)--Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Sterling Bancorp, Inc. (“Sterling” or the “Company”) (NASDAQ:SBT) of the April 27, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in Sterling stock or options between November 17, 2017 and December 8, 2019 and would like to discuss your legal rights, click here: www.faruqilaw.com/SBT. There is no cost or obligation to you.
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The lawsuit has been filed in the U.S. District Court for the Eastern District of Michigan on behalf of all those who purchased Sterling common stock between November 17, 2017 and December 8, 2019 (the “Class Period”). The case, Oklahoma Police Pension and Retirement System v. Sterling Bancorp, Inc. et al., No. 2:20-cv-10490 was filed on February 26, 2020 and has been assigned to District Judge Arthur J. Tarnow.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements about the Company's loan underwriting, risk management and internal controls, including repeatedly touting its strict underwriting, asset quality and the Advantage Loan Program.
On June 21, 2019, after the market closed, Sterling filed a Form 8-K signed by Board Chairman and CEO Thomas Lopp which disclosed that director Jon Fox, who served on the Audit and Risk Management Committee, had resigned from Sterling’s Board, effective immediately. Fox was replaced by Tom Minielly, who would also serve on the Audit and Risk Management Committee (only to resign six months later on December 19, 2019). The Company tried to temper the news, further stating in the 8-K: “Mr. Fox’s retirement and resignation was not due to any disagreement on any matter relating to the Company’s operations, policies or practices.”
On this news, the Company's stock price fell from $10.06 per share on June 21, 2019 to $9.90 per share on June 24, 2019: a $0.16 or 1.59% drop.
Then, on December 9, 2019, the Company filed a Form 8-K disclosing that it was suspending its Advantage Loan Program due to an internal review of documentation on past loans. Specifically, the Form 8-K disclosed:
On December 9, 2019, Sterling Bank and Trust, FSB, Southfield, Michigan (the “Bank”), a wholly-owned subsidiary of Sterling Bancorp, Inc. (the “Company”) voluntarily and temporarily suspended its Advantage Loan program in connection with an ongoing internal review of the program’s documentation procedures. Management believes it is prudent to temporarily halt the program as it continues to audit documentation on past loans and puts in place additional systems and controls to ensure the Bank’s policies and procedures are followed on loans originated under the program. It is the Company’s intention to resume the Loan Program as soon as management is confident its stated policies and procedures are being followed. However, it is presently difficult to estimate how long this suspension might last. The Advantage Loan Program is a material component of the Bank’s total loan originations. While it is difficult to quantify the financial impact of the program’s temporary suspension, management anticipates a reduced level of near-term loan originations, slower overall loan portfolio growth, and less loan sales.
On this news, the Company's stock price fell from $9.45 per share on December 6, 2019 to $7.29 per share on December 9, 2019: a $2.16 or 22.86% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Sterling’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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