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Hubbard v. BankAtlantic Bancorp, Inc.
Citation: 503 F. App'x 677Docket: No. 11-14703
Court: Court of Appeals for the Eleventh Circuit; December 2, 2012; Federal Appellate Court
A security fraud class action was initiated by State-Boston and other class members against BankAtlantic Bancorp, Inc. and its senior officers. The district court had previously granted judgment in favor of the Appellants but partially granted and denied their motion for Rule 11 sanctions regarding the allegations in State-Boston’s complaint and amended complaint. The Appellants challenged the denial of sanctions on several grounds, including the confidential witness allegations and claims of insider trading, accounting fraud, and manipulated loan loss reserves. Additionally, they contested the denial of sanctions related to State-Boston’s claim of damages from securities fraud due to the expert's failure to isolate the impact of non-fraudulent information on stock price decline. On cross-appeal, State-Boston sought to contest the sanctions granted against it concerning allegations made by a third confidential witness, Donna Loverin. The court reviews Rule 11 determinations for abuse of discretion, which occurs if the district court misapplied the law or misjudged the evidence. After reviewing the evidence, the court determined that the district court did not abuse its discretion in denying all sanctions appealed by Bancorp and concluded that State-Boston’s claims were not sanctionable. Furthermore, the court found that State-Boston failed to demonstrate that the district court erred in finding Loverin's allegations sanctionable. Ultimately, the court affirmed the district court's judgment in all respects, with the Eleventh Circuit upholding this decision on July 23, 2012.