|By Tony Adams, Columbus Ledger-Enquirer,
Ga.McClatchy-Tribune Regional News
Jul. 8, 2009--A Florida city's retirement system has filed suit against Synovus Financial Corp. and its top executives, saying the bankholding firm did not properly disclose financial losses connected to the Sea Island Co., which owns a posh resort on the Georgia coast.
The lawsuit against Synovus, which is headquartered in Columbus, was filed Monday in U.S. District Court for the Northern District of Georgia by San Diego-based law firm Coughlin Stoia Geller Rudman & Robbins LLP, which has an office in Atlanta.
The suit, which the law firm is looking to develop into class-action status, was filed on behalf of the City of Pompano Beach General Employees' Retirement System. It also is filed on behalf of anyone who bought Synovus common stock between Jan. 24, 2008, and Jan. 21, 2009, the law firm said in its legal filing.
The lawsuit claims investors in Synovus have been hurt financially because of the alleged improper financial disclosures.
Madelene Klein, executive director of the Pompano Beach General Employees' Retirement System, referred questions to the law firm.
Phone messages seeking comment from two attorneys handling the case for Coughlin Stoia Geller Rudman & Robbins LLP were not returned.
The Pompano Beach retirement system has about 525 active members and 320 retired members, or their beneficiaries, collecting benefits, Klein said.
The city is in Broward County on the southeastern coast of Florida, just north of Fort Lauderdale, with a population of just over 100,000.
Synovus spokesman Greg Hudgison, through an e-mail statement Tuesday afternoon, said the company cannot comment on specifics of the case. But in general terms, the firm refuted the allegations.
"We strongly disagree with the allegations of the lawsuit and plan to vigorously defend against these allegations," the Synovus statement said. "Our financial reporting is subject to stringent review and independent certification, and we stand firmly behind our statements of financial performance."
Aside from the corporation, named in the lawsuit are Synovus executives Richard E. Anthony, Frederick L. Green III, Thomas J. Prescott and Mark G. Holladay. Anthony is chairman and chief executive officer, Prescott is executive vice president and chief financial officer and Holladay is executive vice president and chief risk officer. Green resigned as president and chief operating officer of the banking firm in late May.
The lawsuit alleges Synovus and its top executive officers violated the Securities Exchange Act of 1934. It alleges they failed to disclose the extent of Synovus' exposure to Sea Island Co., which is headquartered on St. Simons Island, Ga., and operates a ritzy resort called The Cloister & The Lodge at Sea Island.
The filing charges Synovus management did not write off loan losses connected to Sea Island in a timely manner and that the company's stock was trading at "artificially inflated prices" during the class-action period, hitting a high of $13.49 per share on Feb. 1, 2008.
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