A trio of Carolina First Bancorp shareholders have sued the bank and its top executives for allegedly accepting millions of dollars worth of stock from a technology company.
The lawsuit, filed Nov. 4 in a Greenville County, S.C., state court, charged that the $4.8 million worth of stock from Affinity Technology Group Inc. had padded the pockets of bank executives. However, it charged, the company itself, which bought a 23% stake in Affinity, did not profit from its investment.
"The bank has not received $125 million in gains from Affinity stock as quoted in the press and press releases," according to the lawsuit. "It has currently received nothing whatsoever."
The class action was brought by Emory Lester, Beatrice Hutchinson, and John Wesley Purdie Jr. It named as defendants Greenville-based Carolina First; Mark Ira Whittle Jr., president and CEO; William S. Hummers 3d, executive vice president; Stephen Powell, chief operations officer; and Edward J. Sebastian, a former board member.
The suit seeks $27.8 million in actual damages and $27.8 million in punitive damages.
The three Carolina First executives allegedly got 666,634 shares of Affinity before the Columbia, S.C., technology firm went public in April. Although the stock award was valued at about $13 million in June, its value has since dropped to about $4.8 million.
Carolina First officials last week disputed the suit's claims.
"Our position is that the suit is totally without merit," said Mr. Hummers. "It makes false and irresponsible allegations."
Mr. Hummers refused to discuss the suit any further. However, he added: "We intend to vigorously defend ourselves against this suit and fully prevail."