An activist investor has called on the lead director of Banc of California in Irvine to disclose details about Chairman and Chief Executive Steven Sugarman's involvement in an investment fund that violated securities laws.
PL Capital, which owns about 5.9% of Banc of California's stock, asked Chad Brownstein to fully disclose Sugarman's involvement in GPS Partners, if the board renominates Sugarman as chairman when his term expires next year.
Brownstein, CEO of Rocky Mountain Resource Holdings, is both vice chairman and lead director of the $7.3 billion-asset Banc of California.
The Securities and Exchange Commission placed GPS Partners under a cease-and-desist order in March 2010, citing securities laws violations. GPS Partners later paid $1.2 million in penalties to the SEC.
PL Capital's Richard Lashley, in a Nov. 30 letter sent to Brownstein, said that Banc of California has never disclosed several pertinent details about Sugarman's involvement with GPS Partners. Sugarman was co-founder of GPS Partners, and he was a co-owner, partner, member and chief compliance officer there during the period that the SEC violations occurred.
However, it is unclear when Sugarman left GPS Partners, Lashley said. Additionally, Banc of California has never disclosed in its own regulatory documents the SEC violations that happened at GPS Partners while Sugarman was involved with the firm.
"Proper disclosures are a key component of the company's code of business conduct and ethics, which requires the company to promote full, fair, accurate, timely and understandable disclosures," Lashley wrote.
Banc of California has not yet scheduled its annual meeting for 2016.
This is not the first time that PL Capital has sparred with Sugarman. In June 2014, Lashley sent Sugarman a letter that described a contentious exchange between the two men at an investor meeting. Lashley accused Sugarman of belittling him at the conference.