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Florida man cites U.S. Supreme Court in securities fraud defense

The Security and Exchange Commission is attempting to prevent BBX Capital Corp. Chairman and CEO Alan B. Levan from holding any position as an officer or executive of a publically traded company.

Levan and BBX were held liable for securities fraud and accounting fraud by a jury late last year. The CEO has an SEC fine pending against him for $1.56 million, while BBX faces a $5.2 million penalty. If the ban is enforced by the federal court, Levan will be out at BBX, BFC (majority owner of BBX) and Evergreen Corp. (the timeshare company that owns The Fountains, a resort in Orlando).

According to a news report, Levan and his attorneys had a motion filed in U.S. District Court to overturn the fraud verdicts denied, and more recently asked the court to reconsider the verdict based on a recent U.S. Supreme Court decision.

BBX was formerly the parent company of BankAtlantic. In the trial, the jury determined that Levan made false statements about BankAtlantic's loan portfolio and thereby committed securities fraud. However, Levan and BBX argue that Levan's statements were true when he made them and that the statements turned out to be accurate later as well.

In the Supreme Court case involving pharmacy services provider, Omnicare, the justices described a specific method of analyzing statements to determine whether they were true, false or misleading in securities fraud claims against a company or an executive. Observers hailed the decision as a clarification that will cut down on so-called Monday morning quarterbacking by plaintiffs; plaintiffs who allege that fraud was perpetrated when an executive stated an opinion about what the future might hold for a stock or company, and then that opinion turned out to be wrong.

The Omnicare case might provide for Levan a way out of his current legal dilemma and it might also help future potential securities fraud defendants avoid indictment with the aid of attorneys who keep abreast of changes in law and understand how to use the changes to protect their clients' rights and interests.

Please see the Securities Fraud Defense page for more information about how the Law Offices of Horwitz & Citro, P.A., P.A. can help you.