Banking and Capital Markets Banking
February 05, 2012
SEC Undermining Independent Research, Says Dick Bove
Bank analyst sued for defamation by BankAtlantic tells Institutional Investor that regulatory inaction almost cost him his career. And he’s not alone.
By Rosalyn Retkwa
It doesnt always pay for an analyst to be right, especially when regulators are way behind. Just ask bank analyst Richard Bove.
Bove certainly wasnt 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 IndyMacs 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 Boves 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, well sue you again.....