ORN Lawsuit; ORN Class Action

Class Action Reports

Levi & Korsinsky Announces Bank OZK Class Action; Bank OZK Lawsuit

Levi & Korsinsky, LLP

November 9, 2018

Colbert v. Bank OZK et al 4:18-cv-00793-JM — On October 26, 2018, investors sued Bank OZK (“Bank OZK” or the “Company”) in United States District Court, Eastern District of Arkansas. Plaintiffs in the Bank OZK class action allege that they acquired Bank OZK stock at artificially inflated prices between February 19, 2016 and October 18, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the Bank OZK Lawsuit, please contact us today!

Summary of the Allegations

Company Background

The Company (NASDAQ: OZK) was known as the Bank of the Ozarks and traded under the ticker symbol “OZRK” until July 16, 0218.

It is a “retail and commercial bank with several subsidiaries focused on investment securities, development of real estate, and ownership of private aircraft.”

According to its website, Bank OZK had assets totaling more than $22 billion, deposits totaling more than $17.8 billion and total loans in the amount of $16.73 billion as of and for the nine months ended September 30, 2018. Its year-to-date income at that time totaled more than $302 million.

Bank OZK is incorporated under Arkansas laws and maintains its principal executive offices in Little Rock. Its history dates to 1903, when it was founded as a small community bank in Jasper, Arkansas.  It opened another bank in Ozark, Arkansas, 34 years later. In all, it now has more than 250 offices in 10 states.

Summary of Facts

Bank OZK and two of its officers and/or directors (the “Individual Defendants”) now stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices and prospects during the Class Period.

Specifically, they are accused of omitting truthful information about the adequacy of Bank OZK’s internal controls to assess credit risk and ancillary issues from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Bank OZK stock to trade at artificially inflated prices during the time in question.

The truth began to emerge on October 18, 2018, when the Company issued a press release announcing its third quarter 2018 financial results. In it, Bank OZK disclosed significant decreases in both net income and diluted earnings per common share for the third quarter of 2018 compared to the same period for 2017.

More importantly, the Company revealed that it had “incurred combined charge-offs of $45.5 million on two Real Estate Specialties Group (‘RSEG’) credits” associated with two unrelated projects in South Carolina and North Carolina. The Company added that the projects had been in the Bank’s portfolio “since 2007 and 2008, and were previously classified as substandard.”

Then, on a conference call with analysts and investors held the next day, one of the Individual Defendants acknowledged that, “one credit became substandard in the second quarter of 2017 and the other in the fourth quarter of 2017.”

A closer look…

As alleged in the October 26 complaint, the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.

For example, on a form filed with the SEC at the beginning of the Class Period, the Company identified failure to properly manage its credit risk as something that could jeopardize its business. It said in relevant part: “Although we attempt to minimize our credit risk through prudent loan and lease underwriting procedures and by monitoring concentrations of our loans and leases, there can be no assurance that these underwriting and monitoring procedures will reduce these risks.”

The Company reported decreases in its substandard loans on forms filed with the SEC on May 6, 2016; August 8, 2016; November 8, 2016; May 5, 2017; November 7, 2017; and May 8, 2018. However, it also reported increases in its substandard loans on forms filed with the SEC on March 1, 2017; August 8, 2017; February 27, 2018; and August 7, 2018.

What the Company failed to disclose, however, was that it “lacked adequate internal controls to assess credit risk,” and that this meant some of its loans “posed an increased risk of loss.” The Company also failed to disclose, “certain substandard loans were reasonably likely to lead to charge-offs.”

Impact of the Alleged Fraud on Bank OZK’s Stock Price and Market Capitalization

Closing stock price prior to disclosures:


Closing stock price the trading day after disclosures:


One day stock price decrease (percentage) as a result of disclosures:



The following chart illustrates the stock price during the class period:

 bank ozk lawsuit bank ozk class action

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is December 26, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Bank OZK common stock using court approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

Bank OZK Class Action Bank OZK Lawsuit

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.