The Bancorp Investors' Deadline to Lead a Historic Securities Fraud Lawsuit Nears

The Bancorp, Inc. (NASDAQ: TBBK) investors face a pivotal moment as the May 16, 2025, deadline approaches for those seeking to become the lead plaintiff in a major securities fraud lawsuit. The case, Linden v. The Bancorp, Inc., alleges that the company misled investors about risks in its $2 billion commercial real estate bridge loan (REBL) portfolio and material weaknesses in its financial reporting. This article examines the legal landscape, the stakes for investors, and the implications of the upcoming deadline.

The Case Against The Bancorp

The lawsuit, filed in the U.S. District Court for the District of Delaware, accuses The Bancorp and its executives of violating federal securities laws by making false or misleading statements between January 25, 2024, and March 4, 2025. Key allegations include:
1. Understated Default Risks: The company allegedly downplayed the risks of its REBL portfolio, which Culper Research revealed in a March 2024 report to be collateralized by deteriorating properties with high vacancies and unsophisticated borrowers.
2. Flawed Accounting: The Bancorp used an inadequate current expected credit loss (CECL) methodology, leading to revised disclosures in October 2024 that reduced net income by $1.5 million.
3. Material Weaknesses in Controls: Auditors refused to approve the company’s 2022–2024 financial statements, citing ineffective internal controls.

These misstatements triggered significant stock declines:
- March 21, 2024: Culper’s report caused a 10% drop to $32.12/share.
- October 24, 2024: Revised CECL disclosures led to a 14% plunge to $47.01/share.
- March 4, 2025: Disclosure of unapproved financial statements drove a 4.4% decline to $51.25/share.

The Role of the Lead Plaintiff

To lead the class action, investors must file a motion by May 16, 2025, demonstrating the largest financial loss during the Class Period. The lead plaintiff will direct litigation strategy and negotiate settlements, but class members need not seek this role to recover losses.

Why Act Now?

• Recovery Potential: If successful, the case could recover millions for investors who lost money due to the alleged fraud. For context, law firms involved in the case have secured settlements like $900 million from Tesla and $420 million from Teva Pharmaceuticals.
• Legal Competition: Multiple firms, including Bleichmar Fonti & Auld LLP, Rosen Law Firm, and Kahn Swick & Foti, LLC, are recruiting investors to join the class. Competing for lead plaintiff status could influence the case’s trajectory.

Risks and Considerations

• No Class Certification Yet: While the lawsuit is active, no class has been formally certified. Investors who delay may miss the deadline to lead, but they can still participate as class members.
• Litigation Costs: The case is handled on a contingency basis, meaning attorneys’ fees are paid only if the plaintiffs win or settle.

Key Takeaways for Investors

1. Act Before May 16: Contact law firms to submit claims or seek lead plaintiff status.
2. Monitor Legal Updates: The outcome hinges on the lead plaintiff’s selection and the court’s rulings on class certification.
3. Historic Precedent: The case mirrors landmark cases like the $7.2 billion Enron settlement, underscoring the importance of corporate transparency.

Conclusion: A Crossroads for Investor Rights

The Bancorp’s alleged fraud has already cost investors billions, with the stock down over 40% since 2023 highs. The May 16 deadline is not just a procedural step—it’s an opportunity for affected investors to shape accountability in corporate governance.

With law firms emphasizing their track records and the potential for substantial recoveries, investors holding TBBK shares during the Class Period should act swiftly. Failing to meet the deadline could mean losing the chance to influence the case, even if recovery is eventually granted. As the financial markets increasingly demand transparency, this lawsuit serves as a reminder that accountability begins with investor vigilance.

For further details, consult the law firms listed below or review court documents for Linden v. The Bancorp, Inc. (No. 1:25-cv-00326-JLH). Time is running out—act before May 16.