Opus Bank has agreed to pay $17 million to settle investors' claims that the bank and its executives misled them on the quality of its loans, causing its stock to drop by 21 percent, according to court documents filed in California federal court Tuesday.
In a motion for preliminary approval of a class action settlement, lead plaintiff Arkansas Public Employees Retirement System asked the court to preliminarily sign off on an all-cash settlement under which class counsel would receive up to 25 percent of the fund, or $4.25 million, for fees, as well as $100,000 to cover expenses. APERS argued that the deal is fair and adequate considering the risks involved with litigation.
"After considering all of the discovery, lead plaintiff concluded that the proposed settlement continues to be in the best interests of the class," the motion said.
If approved, the deal would resolve a putative class action initially launched in October 2016 by lead plaintiff Nancy Schwartz in the wake of the Irvine, California-based bank's announcement that loan charge-offs would impact its quarterly earnings. Within a day of the announcement, Opus' stock price fell 21 percent, or $7.25 per share, according to the complaint.
Investors' counsel Steven J. Toll of Cohen Milstein Sellers & Toll PLLC said in a statement they are very pleased with the proposed settlement. Toll's co-counsel at Cohen Milstein, Daniel S. Sommers, added that the proposed deal is an excellent recovery for investors who were injured due to their investments in Opus.
Along with Mr. Toll and Mr. Sommers, the investors are also represented by S. Douglas Bunch of Cohen Milstein Sellers & Toll PLLC.
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