Tuesday, July 22, 2008

Bank shoots messenger (again)

BankAtlantic filed an anti-defamation suit against analyst Richard Bove of Ladenburg Thalmann. Bove had ranked BankAtlantic #10 on a list of 107 publicly-traded banks carrying a high percentage of troubled or nonperforming loans. BankAtlantic took exception to the ranking because the calculations were based on the capital base of the bank's parent company. Bove issued a clarification in a separate note, but that was not enough to mollify BankAtlantic.

At face value, this looks like another case of a bank trying to shoot the messenger. However, given the volatility of the banking sector, it certainly doesn't take much to unhinge already unsettled investors and institutions need to respond vigorously to quell rumors and misinformation. While this lawsuit might not go anywhere, it probably is the strongest signal (or bluff) that BankAtlantic can send to the market, at this time.

No comments: