It doesn’t always pay for an analyst to be right, especially when regulators are way behind. Just ask bank analyst Richard Bove.

Bove certainly wasn’t looking to become the poster child for retaliation by a company he followed when he wrote a report titled, “Who is Next?” in July 2008. In the wake of IndyMac’s failure, he used two metrics to rank the banks he thought were at the greatest risk from the growing real estate bust. Within days, BankAtlantic Bancorp — No. 10 by one metric and No. 12 by the other — sued him for defamation.

Bove was with Ladenburg Thalmann at the time, and he says he left the firm in February 2009 rather than go along with a settlement under which the firm had agreed to pay the bank holding company a reported $300,000. (Ladenburg declined to comment on the settlement, citing a confidentiality agreement, or on Bove’s departure.) Now with Rochdale Securities, Bove hired his own attorney, racking up $800,000 in legal bills, and he says he still “owes $700,000, not a small amount to me.” He settled with the bank holding company in June 2010 but without any admission of liability on his part, and “I paid them nothing,” Bove says. But, he was forced to drop his coverage, he says and was told, “If you open your mouth about this company again, we’ll sue you again.”

So how does Bove feel now that the Securities and Exchange Commission has finally filed suit against the Fort Lauderdale–based bank holding company and its CEO and chairman Alan Levan?

“I don’t feel vindicated,” Bove says in an interview with Institutional Investor, “I feel upset, frustrated, annoyed that the system simply doesn’t work for independent research.”

Bove is deeply paranoid about being sued again and struggles with what he wants to say on the record. But he notes that “it’s a fact” that the bank holding company was already under investigation by the SEC in 2007 because that disclosure was made in its publicly available SEC filings. If the SEC had moved sooner, “instead of doing nothing for that five-year period,” Bove says, “not only would investors have avoided losing all that money they lost, but that lawsuit [against Bove] would have fallen apart.” When Bove wrote his report on July 15, 2008, the stock was a split-adjusted $23.47. As of this January 30 it closed at $3.01 for a loss of 87 percent.