SOURCE: Bernstein Litowitz Berger & Grossmann LP

October 22, 2010 21:17 ET

Bernstein Litowitz Berger & Grossmann LLP Announces the Filing of a Class Action Suit Against PrivateBancorp, Inc.

NEW YORK, NY--(Marketwire - October 22, 2010) - Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") today announced that it filed a class action lawsuit in the United States District Court for the Northern District of Illinois (the "Court") on behalf of purchasers of PrivateBancorp, Inc.'s ("PrivateBancorp" or the "Company") (NASDAQ: PVTB) publicly traded common stock between November 2, 2007 and October 23, 2009, inclusive (the "Class Period"), and investors who purchased or otherwise acquired PrivateBancorp's common stock pursuant and/or traceable to registered public offerings conducted on or about June 4, 2008 (the "2008 Offering") and May 11, 2009 (the "2009 Offering"). The case is captioned City of New Orleans Employees' Retirement System v. PrivateBancorp., Inc., No. 10-cv-6826 (N.D. Ill.). 

The claims alleged in the complaint are asserted against PrivateBancorp, certain of its senior executives and directors, the underwriters of PrivateBancorp's 2008 and 2009 Offerings, and its independent auditor. 

PrivateBancorp is a Chicago-based financial services company that concentrates on commercial banking and private banking for high-net worth individuals and families. 

The action alleges that during the Class Period the defendants violated the federal securities laws by engaging in improper behavior and by issuing materially false and misleading statements regarding PrivateBancorp's business and financial results that harmed the Company's investors. Specifically, the complaint alleges that the defendants misrepresented the Company's Strategic Growth and Transformation Plan (the "Growth Plan") which led PrivateBancorp to generate hundreds of millions of dollars in commercial and industrial loans that were high risk, and that the Company misrepresented the quality of its residential loan portfolio, which was suffering severe deterioration. As a result of defendants' false statements, PrivateBancorp's stock traded at artificially inflated prices throughout the Class Period. While PrivateBancorp's stock was artificially inflated, the Company conducted two public offerings, resulting in hundreds of millions of dollars in net proceeds to the Company.

Prior to the start of trading on October 26, 2009, PrivateBancorp shocked investors by reporting third quarter 2009 earnings results that fell far short of expectations. Despite having written off in excess of $100 million in bad loans in January 2009, the Company revealed that it held almost $400 million in nonperforming loans as of the third quarter 2009. PrivateBancorp further disclosed that its elevated levels of nonperforming loans were originated under the Growth Plan. In response to the Company's October 26 disclosure, PrivateBancorp stock fell over 37%, dropping from $19.00 per share to $11.98. The action alleges claims under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"). 

If you wish to serve as lead plaintiff for the Class, you must move the Court no later than 60 days from today. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class. 

The City of New Orleans Employees' Retirement System is represented by BLB&G, a firm of over 50 attorneys with offices in New York, California, and Louisiana. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Gerald H. Silk of BLB&G at 212-554-1400, or via e-mail at jerry@blbglaw.com. Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity. Specializing in securities fraud, corporate governance, shareholders' rights, employment discrimination and civil rights litigation, among other practice areas, BLB&G prosecutes class and private actions on behalf of institutional and individual clients worldwide. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering billions of dollars on behalf of defrauded investors. More information about BLB&G can be found online at www.blbglaw.com.

Contact Information

  • CONTACT:
    Gerald H. Silk
    Avi Josefson
    Laurence J. Hasson
    Bernstein Litowitz Berger & Grossmann LLP
    1285 Avenue of Americas
    New York, NY 10019
    (212) 554-1400