NEW YORK (Reuters) - Richard Bove, a prominent U.S. banking analyst, was sued on Monday by BankAtlantic Bancorp Inc (BBX.N), which accused him of defamation and negligence over a recently published research report, the bank said.
The bank said the lawsuit, filed in a state court in Broward County, Florida, pertained to a report dated July 13 and titled “Who Is Next?”
The report was dated two days after federal regulators seized IndyMac Bancorp Inc IDMC.PK, a large mortgage lending specialist, following a run on that savings and loan.
Alan Levan, BankAtlantic’s chairman, said in a statement on Monday that BankAtlantic’s financial condition showed that the bank did not belong on any list of lenders that might be “next” to fail.
Bove was advised not to comment on the advice of counsel, his assistant said.
Paul Caminiti, a spokesman for Bove’s employer, Ladenburg Thalmann Financial Services Inc (LTS.A), said: “We will defend ourselves against this meritless lawsuit.”
BankAtlantic did not immediately make available a copy of the complaint.
BFC Financial Corp BFF.P, a holding company, has a controlling stake in BankAtlantic, according to BFC’s website. Both companies are based in Fort Lauderdale, Florida.
David Schulz, a partner at Levine Sullivan Koch & Schulz LLP in New York who specializes in libel and defamation claims, said the issue turned on whether Bove, in his report, knowingly or recklessly misstated a fact related to BankAtlantic.
“If his rationale is mistaken, that’s typically not a ground for a defamation claim,” Schulz said.
“If the bank thinks his analysis is wrong, so long as he laid out his facts and the reasons for his opinion that the analysis is meaningful, then he has a right to that opinion.”
In his original report, Bove cited data from the Federal Deposit Insurance Corp in assessing more than 100 of the largest U.S. banking companies.
He said he compared reported non-performing assets with levels of outstanding loans, and with levels of reserves plus common equity.
Bove wrote that “at this point the desire is to look beyond IndyMac and see who the next failure is.”
He also said that based on the data, the banking system “is not anywhere near the danger that existed in the late 1980s and early 1990s.”
Levan, the BankAtlantic chairman, said that in light of the bank’s capital levels and ratios of non-performing loans to total loans and to capital and reserves, “No one would ever conclude that BankAtlantic belongs to any list of ‘next.'”
Shares of BankAtlantic closed up 14 cents at $1.82 on the New York Stock Exchange.
Additional reporting by Dan Wilchins; Editing by Brian Moss, Toni Reinhold