A small South Carolina bank has countersued six customers who claimed it duped them with a scam investment program.
Rock Hill Bank and Trust says that it is the victim, and has accused the customers of conspiring with two other people to damage it.
In its suit, filed Monday with the U.S. district court in Columbia, S.C., the $200 million-asset bank said that the investors lawsuit has affected its stock and may have cost it a profitable merger opportunity.
The banks share price has plunged more than 25%, to $11.75, since the customers suit was filed Feb. 16, and a month ago it suspended merger plans with Ridgeway Bancshares of Ridgeway, S.C.
Rock Hill Bank has asked for trial fees, special damages, and punitive damages but did not specify a figure.
The investors lawsuit alleges that the bank and its loan officer, Robert M. Yoffie, promoted a fraudulent investment program that cost them $9.5 million the amount of their deposit. Lawyers on both sides declined to discuss the case.
Both of the claims stem from the deposit, which lead plaintiff Samuel R. Anthony and five other investors made in an agency account at Rock Hill Bank last year. Their lawsuit says that the bank promoted a program that promised returns of at least 15% a month for 10 months, and that Mr. Yoffie told them 18 to 20 other people had been involved in a similar program at the bank and had made the expected returns.
However, the plaintiffs claim they saw little return and have been unable to access their money.
Rock Hill Bank denies that it ever had such a program or that Mr. Yoffie, who quit the bank in early February, was involved in it. In court documents the bank says that it returned some of the original funds and that some or all of the rest were returned through other channels, including the two others it is pursuing in its lawsuit: Donald E. Hughes, who introduced the investors to the program, and Douglas J. Smith, who had power of attorney over the account.
The investors say Mr. Yoffie was on the board of directors of Mr. Hughes construction company; the bank says that the investors had a series of business relationships with Mr. Hughes.
Though the bank denies nearly every claim in the investors lawsuit, including those related to Mr. Yoffie and his relationship with Mr. Hughes, it has asked for indemnification from Mr. Yoffie for any resulting damages suffered by the bank if he is found liable.