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TBBK.US
id: 1529
The Bancorp ($TBBK) Misleading Loan Risks and Accounting Issues Case
D. Delaware
Court1:25-cv-00326
Case number01/25/2024
Class period Start03/04/2025
Class period End05/13/2025
Lead Plaintiff motion deadline- $TBBK investors filed a lawsuit against The Bancorp for concealing the risk of defaults in its real estate bridge loan (REBL) portfolio and accounting weaknesses.
- After admitting financial statement errors and disclosing auditor concerns on March 4, 2025, $TBBK fell 4.38%.
Case Details:
On March 4, 2025, after the market closed, The Bancorp ($TBBK) announced that investors could no longer rely on its financial statements from 2022 to 2024 due to accounting errors and auditor concerns.
The company admitted that its auditors refused to approve its financial statements, citing problems with how Bancorp accounted for credit losses on its consumer fintech loans. As a result, Bancorp delayed its annual report and began reviewing its internal controls, raising concerns about serious financial reporting weaknesses.
This came after months of warnings about hidden risks in The Bancorp’s real estate bridge loan (REBL) portfolio. On March 21, 2024, Culper Research released a report claiming that many of the apartment buildings backing these loans were in poor condition, with high vacancies and structural issues. The report alleged that Bancorp’s reserves for loan losses were dangerously low, putting the company at risk for major write-offs.
Despite these concerns, Bancorp assured investors that its REBL loans had "no substantial risk of default or loss." However, the company later increased its loan loss provisions and admitted it had added new credit risk factors, confirming the issues raised by Culper Research.
When Bancorp finally disclosed its financial reporting issues on March 4, 2025, $TBBK stock fell 4.38%.
Based on these events, $TBBK investors filed a lawsuit against The Bancorp, claiming the company:
- It failed to properly account for credit losses on its consumer fintech loans.
- It misled investors about the reliability of its financial statements, which its auditors later refused to approve.
Investors believe The Bancorp knowingly concealed financial risks, leading to significant stock losses when the truth was revealed.
Case Status
Lead Plaintiff Appointment
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
03/04/2025
Filing date
03/14/2025
Lead Plaintiff Deadline
05/13/2025