in re: bankatlantic bancorp, inc. securities litigation 07-cv...

Case 0:07-cv-61542-UU Document 703 Entered on FLSD Docket 05/16/2011 of 7

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

CASE NO. 07-61542-CIV-UNGARO

IN RE BANKATLANTIC BANCORP, INC. SECURITIES LITIGATION

AFFIDAVIT OF AMY N. GREENBAUM SUBMITTED IN OPPOSITION TO DEFENDANTS’ MOTION FOR SANCTIONS

STATE OF NEW YORK ss.:

COUNTY OF NEW YORK

Amy N. Greenbaum, being first duly sworn, deposes and says:

I am a Senior Lead Investigator at Labaton Sucharow LLP (“Labaton”). I have

been employed by the firm since February 2005. I make this affidavit to summarize the process

by which the information related to the complaints in this action was obtained and who was

involved in supervising my investigative efforts.

2. Throughout my investigation I was supervised by the partners and associates

preparing the complaints. Specifically I worked with Labaton attorneys Michael Stocker, Serena

Hallowell (formerly Richardson), Paul Scarlato and Jonathan Gardner, referred hereto as

“supervising attorneys.” I engaged in the process of identifying and interviewing persons with

relevant information for potential use in the Consolidated Amended Complaint (“CAC”) to be

filed in this action.


A couple of months after I started the investigation, I was joined by Janet Nyhart

of Barroway, Topaz, Kessler, Meltzer & Check LLP (“Barroway”) who assisted in the

investigation thereafter. Once we identified leads of potential witnesses, Janet and I divided up

the responsibility for attempting to contact and interview certain witnesses. I interviewed six of

the seven confidential witnesses identified in the CAC – Barbara Halprin, Donna Loverin,

Warren Toole, Mike Blevins, Mark Meek and Susan Imbrigiotta. Barroway interviewed one

confidential witness included in the CAC – Johnny Irizarry.

4. My investigation into BankAtlantic began on February 19, 2008 and involved

numerous interviews. Prior to calling any potential confidential witness, I confirmed that each

was no longer employed by BankAtlantic.

5. Prior to beginning the interviews with each of the confidential witnesses, I

identified myself as an investigator from Labaton Sucharow LLP.

6. Consistent with Labaton’s investigative practices and procedures, with one

exception, I took notes contemporaneously with my witness interviews and prepared detailed

investigator memoranda of the interviews on the same day or shortly following the interviews. I

provided these investigator memoranda to the attorneys at Labaton working on the BankAtlantic

case for review and the memoranda were utilized in drafting the CAC and the First Amended

Consolidated Complaint (“FACC”).

7. The only confidential witness whose interviews were recorded was Donna

Loverin because she was located in New Jersey (a one-party consent state) and I was in New

York (also a one-party consent state). The recording was then transcribed and used as an aid for

the investigators and lawyers.

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8. Donna Loverin was identified as a potential witness. She informed me that her

title was Analyst and Underwriter, that she was employed in the credit department which

serviced both small business and corporate lending and that she was employed from February

1996 through January 2006. She was first interviewed on April 3, 2008. The interview was

recorded and then transcribed. I then re-contacted Loverin on April 4, 2008 with follow-up

questions that the supervising attorneys provided to me after reviewing the transcript of my

previous interview. After receiving the Court’s December 11, 2008 order dismissing the CAC

with leave to amend, I re-interviewed Loverin on December 22, 2008. All of my interviews with

Loverin were recorded and transcribed. I circulated investigator memoranda containing the

transcripts to the supervising attorneys within 1-2 days of each call with Loverin.

9. Barbara Halprin was identified as a potential witness. I first interviewed Halprin

on April 7, 2008. She informed me that she had been a Senior Vice President-Loan Servicing

and Closing Officer at BankAtlantic and had been employed by BankAtlantic from February 9,

1993 through March 27, 2007. I conducted follow-up interviews with Halprin on April 8th and

18th, 2008. The follow-up interviews with Halprin included questions I received from my

supervising attorneys. Contemporaneous notes taken by me were reflected in memoranda sent to

the supervising attorneys 1-2 days after each of the calls with Halprin. After the order dismissing

the CAC, I re-interviewed Halprin on December 18, 2008 and January 8, 2009. Attorney

Hallowell participated in portions of both of these interviews with Halprin. I understood that Ms.

Hallowell joined these interviews because Lead Counsel identified Halprin as the most crucial

witness in re-pleading the complaint. After both of those calls, I circulated investigator

memoranda detailing the information obtained from Halprin to the supervising attorneys.


10. Warren Toole, was identified as a potential witness. I interviewed Toole on

March 14, 2008. He informed me that he had been a Senior Vice President of Commercial

Lending in the Tampa Office of BankAtlantic from November 2000 through October 2006. I

circulated an investigator memorandum detailing my interview with Toole to the supervising

attorneys. The attorneys had additional questions for Toole. I attempted to re-contact Toole but

was unable to re-interview him.

11. Michael Blevins was identified as a potential witness. I interviewed him on

March 11, 2008. He informed me that he had been a Senior Vice President and Market Manager

for the Jacksonville Commercial Lending Office of BankAtlantic from April 2002 through

February 2008. I circulated an investigator memorandum detailing my call with Blevins to the

supervising attorneys on the same day.

12. Mark Meek was identified as a potential witness. I interviewed him on March 12,

2008. He informed me that he had been a Vice President of Commercial Lending for the Tampa

Office of BankAtlantic from December 2002 through December 2005. After my interview with

Meek, I circulated an investigator memorandum detailing the interview of Meek to the

supervising attorneys two days later.

13. Susan Imbrigiotta was identified as a potential witness. I interviewed her on

March 10, 2008. She informed me that she had been a Vice President of Commercial Lending at

the Broward County Office of BankAtlantic from March 1997 through October 2005. That day,

I circulated an investigator memorandum to the supervising attorneys detailing the call.

14. Throughout my investigation of BankAtlantic, some of the former employees I

spoke with expressed concern about retaliation by BankAtlantic and Alan Levan. I was involved

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in discussions with the supervising attorneys of ways to protect the identities of the witnesses

prior to filing the CAC and FACC.

15. After reviewing the Order dated December 11, 2008 dismissing the CAC the

supervising attorneys provided me with follow-up questions for all of the confidential witnesses.

16. Exhibit A attached hereto is a chart containing the CW allegations in the FACC

and true and correct excerpts from the Loverin transcripts and from my investigator memoranda

relating to Haiprin, Toole, Blevins and Meek.

AMY N. GREENBAUM

Sworn to before me this 16th day of May, 2011

4~UMiry ubli,

RACHEL LYN MESSIER Notary Public, State of New York

No. 01ME6082257 Qualified in NEW YORK Count Commission Expires 4J1 9J201

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on May 16, 2011, I electronically filed the foregoing

document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document

is being served this day on all counsel of record or pro se parties identified on the attached

Service List in the manner specified, either via transmission of Notices of Electronic Filing

generated by CM/ECF or in some other authorized manner for those counsel or parties who are

not authorized to receive electronically Notices of Electronic Filing.

/s/ Ronald D. Shindler RONALD D. SHINDLER


SERVICE LIST

Adam M. Schachter Eugene E. Stearns Gordon M. Mead, Jr. Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. 150 W. Flagler Street, Suite 2200 Miami, FL 33130 Telephone: (305)789-3400 Facsimile: (305) 789-3395 [email protected] [email protected] [email protected]

Case 0:07-cv-61542-UU Document 703-1 Entered on FLSD Docket 05/16/2011 Page 1 of 38

Exhibit A


Johnny Irizarry (CW#1) FACC Para. Allegation from FACC Quoted Excerpts from Investigator Memorandum of Interview

58 Specifically, from personal experience gained during the Class Period, A. It is atypical for a credit department to report to a lending CW1 described a lending environment where the Bank’s Credit department in banking. The CCD is charged with underwriting Department reported directly to the lending department. CW1 stated loans and providing checks and balances to mitigate risk. The that this type of reporting structure is atypical in banking because the CCD should remain separate from Loan Operations. By reporting Credit Department is supposed to provide checks and balances to to Loan Operations, the CCD reported to the lenders who received mitigate risk. According to CW1, this structure was problematic commissions based on loan approvals. Snyder’s compensation because, by reporting to the lending department, the Credit was based on meeting loan quotas. Department reported to the lenders who received commissions based on loan approvals, and whose compensation was dependant on meeting loan quotas.

58 In fact, during the Class Period, the Credit Department ultimately A. Irizarry reported to Linda Kilgo (Kilgo) in Loan Operations. reported to Marcia Snyder (“Snyder”), Executive Vice President of Kilgo reported to the Executive Vice President of Lending, Lending. CW1 recalled that Snyder’s compensation was based on Marsha Snyder (Snyder). meeting loan quotas.

B. It is atypical for a credit department to report to a lending department in banking. The CCD is charged with underwriting loans and providing checks and balances to mitigate risk. The CCD should remain separate from Loan Operations. By reporting to Loan Operations, the CCD reported to the lenders who received commissions based on loan approvals. Snyder’s compensation was based on meeting loan quotas. Irizarry attempted discussing credit issues with Kilgo, but she was not knowledgeable in the area of credit, and would defer to his judgment, further illustrating why lending and credit departments need separation.

C. Snyder’s compensation was based on meeting loan quotas. 59 (not cited by Defendants’ CW1 also stated that in the case of CRE loans, the lenders themselves A. By reporting to Loan Operations, the CCD reported to the lenders

chart) underwrote their own loans during the Class Period. This undermined who received commissions based on loan approvals. risk controls, as the very people who received commissions based on the amount of loans they underwrote were also in charge of the B. More disconcerting was the fact that in the case of commercial underwriting and due diligence on those CRE loans. real estate (CRE), the lenders were underwriting the loans. It was

difficult to believe banking regulators did not censure BankAtlantic for this practice. Irizarry wondered why BankAtlantic treated CRE loans differently from all other



commercial loans which were underwritten by the CCD, not the lenders.

C. 59 (not cited by Defendants’ According to CW1, CRE loans were treated differently from the A. It is atypical for a credit department to report to a lending

chart) Bank’s other loans that were properly underwritten by the Credit department in banking. The CCD is charged with underwriting Department, not the lenders. loans and providing checks and balances to mitigate risk.

B. Irizarry wondered why BankAtlantic treated CRE loans differently from all other commercial loans which were underwritten by the CCD, not the lenders.

62 According to CW1 and CW2, loan approval required a vote of three of Memo from CW2: the six Committee members during the Class Period. A. Three votes were needed to approve a loan regardless if the three

other committee members were against it.

62 (not cited by Defendants’ CW1 and CW2 were aware of these facts from their direct B. Irizarry served as Secretary during both loan committee meetings, chart) participation in the Major Loan Committee meetings and with respect and he took the minutes.

to CW2, from seeing, generating and distributing specific reports to all members of the Major Loan Committee during the Class Period.

65 Based on their personal observation as employees of the Bank A. Money was not supposed to be disbursed before appraisal. Kilgo, involved in the credit, servicing and closing aspects of CRE loans, however, was directed by Snyder to make loan disbursements CW1 and CW2 stated that many of the loans in the BLB, LAD and before appraisals were complete. This was not proper procedure. LADC portfolios made during the Class Period were not properly There was no respect for credit. “It was a joke.” There were documented and other conditions of closing were not satisfied. many exceptions at closings.

66 (not cited by Defendants’ Internal BankAtlantic procedures also required members of the Credit A. As Credit Manager, Irizarry was supposed to give his opinion on chart) Department, such as CW1, to provide opinions on the creditworthiness the creditworthiness and technical aspects of the CRE loans, as



and technical aspects of CRE loans, as well as underwriting aspects of well as underwriting those loans. Instead, the only function the the loans. CCD performed in CRE lending was the analysis of the personal However, CW1 stated that, based on first hand observations as a tax returns of the guarantors. Guarantors are the secondary source commercial credit officer, the only function the Credit Department of repayment, and this was not proper due diligence. actually performed during the Class Period in connection with CRE lending was the analysis of personal tax returns of the guarantors. CW1 explained that guarantors are a secondary source of repayment, and consideration of this factor alone was not proper due diligence.

67 Specifically, during the Class Period, CW1 witnessed occasions A. Irizarry recalled Abdo telling a story of golfing with a real estate where Major Loan Committee members approved loans based on developer and how the developer was complaining about not character lending, while rejecting attempts to discuss credit concerns getting sales. Abdo was concerned that the bank lent the money and the technical aspects of loans during meetings. to this developer based on the belief the builder would get sales.

Abdo was attempting to raise a question regarding the riskiness of the loan. Snyder would not let him finish speaking and said that the developer was a good risk, based on knowing the guy for a long time and his net worth.

B. During loan committee meetings, Irizarry attempted to discuss credit concerns and the technical aspects of the loans. Snyder would “blow up” saying words to the effect of: “The bank has known the borrower for a long time, the borrower is established in the real estate industry, and has a huge net worth and the issues are not pertinent.” Irizarry described this as character lending.

67 (not cited by Defendants’ According to CW1, from a credit perspective the problem with A. During loan committee meetings, Irizarry attempted to discuss chart) “character lending” was that without proper due diligence, the Bank credit concerns and the technical aspects of the loans. He,

could not tell if a borrower was overextended. however, met with resistance from Snyder. Snyder balked at Irizarry’s comments, barely letting him speak. Snyder would “blow up” saying words to the effect of: “The bank has known the borrower for a long time, the borrower is established in the real estate industry, and has a huge net worth and the issues are not pertinent.” Irizarry described this as character lending. From a credit perspective, even if a guarantor had a high net worth,



without due diligence, the bank did not know if he was overextended.

68 Indeed, CW1 stated that Snyder would often get in quarrels with Linda A. Kilgo had serious quarrels with Snyder, because as part of Loan Kilgo, (“Kilgo”) who also worked in the Credit Department during the Operations, Kilgo was responsible to put the loan documents Class Period, because Snyder would direct Kilgo to make loan together before closing. Money was not supposed to be disbursed disbursements before appraisals were complete, which violated before appraisal. Kilgo, however, was directed by Snyder to make Company policy. loan disbursements before appraisals were complete. This was

not proper procedure.

73 CW1 and CW2 both stated that the Credit Department was A. The CCD was powerless in terms of CRE lending. “powerless” to reign in the Company’s reckless CRE lending during the Class Period. B. The loan committees had a reckless disregard for the CCD.

73 (not cited by Defendants’ According to CW1, Snyder, as Executive Vice President of Lending, A. Abdo made attempts to bring in a risk perspective to the chart) overrode attempts to bring a risk perspective to Committee meetings. committee meetings, but was overridden by Snyder.

B. During loan committee meetings, Irizarry attempted to discuss credit concerns and the technical aspects of the loans. He, however, met with resistance from Snyder. Snyder balked at Irizarry’s comments, barely letting him speak.

73 CW1 also said that loan officers under Snyder “got away with murder” A. Loan officers under Snyder “got away with murder.” Kilgo had and explained that Snyder directed loans to be funded before the loan serious quarrels with Snyder, because as part of Loan Operations, documents were put together and appraisals were received. Kilgo was responsible to put the loan documents together before

closing. Money was not supposed to be disbursed before appraisal. Kilgo, however, was directed by Snyder to make loan disbursements before appraisals were complete.

73 (not cited by Defendants’ CW1 said there was no respect for credit and “it was a joke” that there A. There was no respect for credit. “It was a joke.” There were chart) were that many exceptions at closing. many exceptions at closings.



75 (not cited by Defendants’ According to CW1, whose job it was to opine on the credit worthiness A. As Credit Manager, Irizarry was supposed to give his opinion on chart) of loans, these loans were highly speculative because they were based the creditworthiness and technical aspects of the CRE loans, as

on the belief that the land will appreciate, and construction loans are well as underwriting those loans. risky, because of the many facets and problems which can occur during the construction process. B. As far as the risks of these loans are concerned, land loans are

highly speculative, because they are based on the belief that the land will appreciate; and construction loans are risky, because of the many facets and problems which can occur during the construction process.


Barbara Halprin (CW#2) FACC Para. Allegation from FACC Quoted Excerpts from Investigator Memorandum of Interview

60 (not cited by Defendants’ Confidential Witness #2 (“CW2”) was a managerial level employee in the A. Halprin was with BankAtlantic from February 9, 1993 through chart) Bank’s loan servicing and closing department, who has specific and March 27, 2007. Halprin held the position of Senior Vice

detailed knowledge about the Bank’s CRE lending practices, including its President-Loan Servicing and Closing Officer since 2001. underwriting, compliance and closing procedures during the Class Period.

60 (not cited by Defendants’ CW2 was employed by the Bank prior to and during the majority of the A. She explained further that BankAtlantic was required to have an chart) Class Period. According to CW2, the Bank had in place and was required “approved policies” which was “audited” on a regular basis by the

to follow very detailed, written lending policies and underwriting OTS. When asked which internal/OTS policies were specifically procedures approved by the OTS in connection with every CRE loan the violated, Halprin said this was hard to specify since the policies Bank made. (internally and OTS) are so extensive.

B. According to Halprin, ...there were written policies that were “very detailed.”

60 (not cited by Defendants’ CW2 was personally aware of these lending policies and procedures as a A. Halprin was responsible for all loans (commercial, consumer and chart) direct result of CW2’s duties as an individual who was tasked with small business).

monitoring the Bank’s compliance during the Class Period. B. Writer asked Halprin how she knew that they disregarded

underwriting procedures in the commercial lending division, Halprin explained that she was in the know because she managed the commercial lending area and was the “police” of those loans. Part of Halprin’s responsibilities was making sure that every loan was documented the right way. Specifically, Halprin advised that much of the personnel that was handling the underwriting of the commercial loans was inexperienced and therefore did not know the proper way to underwrite such large loans. Halprin felt that this was true of Lloyd DeVaux (current COO) and her direct report Linda Kilgo. Halprin recalled that on a regular basis, herself (and other “experienced” employees) would be “overridden” by their inexperienced supervisors.

C. Halprin’s group became responsible for signing off on the funding of a loan (as long as it was approved by the Major Loan Committee and any exceptions were approved). Halprin advised



that written policy required “exception processing” prior to a loan being funded (which was under her domain).

D. Halprin had to review the [MLC] minutes as part of her internal audit function.

61 (not cited by Defendants’ According to CW2, the Bank’s Major Loan Committee, which met in the A. Deals over $5 million would go to major loan committee. chart) boardroom of the Bank’s corporate headquarters, was responsible for

approving CRE loans in excess of $5 million in the BLB, LAD and LADC B. According to Halprin they were held in BankAtlantic’s (BA) portfolios. corporate offices, in their board room.

61 (not cited by Defendants’ During the Class Period, the Committee had six voting members, A. According to Halprin, Major Loan committee was made up of chart) including defendants A. Levan, Abdo and J. Levan. According to CW1 Alan Levan, Marcia Synder, Jay McClung, Jeff Mindling, Jack

and CW2, A. Levan and Abdo were voting members of the Major Loan Abdo and Jarrett Levan (when he came on as President). Committee during the Class Period. A. Levan and Abdo also served as Chairman and Vice Chairman of the Committee, respectively, during part of the Class Period. According to CW2, J. Levan similarly was a voting member of the Major Loan Committee for the majority of the Class Period, starting when he became President of BankAtlantic.

62 (not cited by Defendants’ According to CW1 and CW2, loan approval required a vote of three of the A. Three votes were needed to approve a loan regardless if the three chart) six Committee members during the Class Period. other committee members were against it.

B. Then in order to “approve” the deal, three signatures of ANY voting member of the Major Loan Committee would be required.

62 (not cited by Defendants’ CW1 and CW2 were aware of these facts from their direct participation in A. Halprin confirmed that throughout the class period she saw and chart) the Major Loan Committee meetings and with respect to CW2, from generated exception reports that were circulated to all the

seeing, generating and distributing specific reports to all members of the members of the Major Loan Committee, the Board of Directors Major Loan Committee during the Class Period. and the Officers of the company. This would have included all of

the individual defendants during the class period that Halprin identified by name. In fact, the company’s Board of Directors would enter the exception report into the minutes of each of their meetings.

B. Halprin confirmed that the Steeplechase loan was discussed at Major Loan Committee meetings which were attended by Alan Levan, Jack Abdo and Jarett Levan. She knows this because she



often attended these meetings as well as a non-voting participant.

C. In addition, this would have been discussed at the Major Loan Committee meetings. She knows this because she often attended the meetings. Sometimes the meetings would be attended by a lot of people and then the major players (the Levans, Abdo, Snyder, Mindling) would excuse the other attendees so they could discuss things like moving a bad loan into one of their subsidiaries.

D. In preparation for every meeting, there was an agenda circulated to all invitees. Halprin confirmed that throughout the class period, problematic loans appeared on the agenda. She knew this because she was frequently invited to the meetings.

62 (not cited by Defendants’ Thus, these CWs attended and participated in numerous high level A. Halprin confirmed that the Steeplechase loan was discussed at chart) meetings with A. Levan, J. Levan and Abdo and have specific knowledge Major Loan Committee meetings which were attended by Alan

of the proceedings therein. Levan, Jack Abdo and Jarett Levan. She knows this because she often attended these meetings as well as a non-voting participant.

B. She added that Jack Abdo and Jarett Levan would have been well aware of Alan Levan’s decision to do that and advised him on it. In addition, this would have been discussed at the Major Loan Committee meetings. She knows this because she often attended the meetings. Sometimes the meetings would be attended by a lot of people and then the major players (the Levans, Abdo, Snyder, Mindling) would excuse the other attendees so they could discuss things like moving a bad loan into one of their subsidiaries.

C. In preparation for every meeting, there was an agenda circulated to all invitees. Halprin confirmed that throughout the class period, problematic loans appeared on the agenda. She knew this because she was frequently invited to the meetings.

63 (not cited by Defendants’ According to CW2, it was a regular practice for problematic loans to be A. Halprin confirmed that the Steeplechase loan was discussed at



chart) included on the agenda at Major Loan Committee meetings for discussion Major Loan Committee meetings which were attended by Alan and approval during the Class Period. Major Loan Committee members Levan, Jack Abdo and Jarett Levan. She knows this because she regularly discussed problem loans during the Class Period in the often attended these meetings as well as a non-voting participant. Committee meetings, at which CW2 was often present. CW2 added that discussion of these problem loans during the Class Period, which were all B. In addition, this would have been discussed at the Major Loan identified in Exception Reports, also made it into the Committee meeting Committee meetings. She knows this because she often attended minutes, which CW2 was also able to review in furtherance of CW2’s the meetings. Sometimes the meetings would be attended by a lot compliance-oriented job duties. of people and then the major players (the Levans, Abdo, Snyder,

Mindling) would excuse the other attendees so they could discuss things like moving a bad loan into one of their subsidiaries.

C. In preparation for every meeting, there was an agenda circulated to all invitees. Halprin confirmed that throughout the class period, problematic loans appeared on the agenda. She knew this because she was frequently invited to the meetings. Halprin advised that very often when the topic of problematic loans was discussed, many of the attendees of the meeting were excused leaving just the voting members and a select few to discuss the problematic loans. Halprin knew this because she would review the minutes after the meeting. Halprin had to review the minutes as part of her internal audit function.

63 (not cited by Defendants’ CW1 and CW2 added that these minutes were maintained by a member of A. The minutes from the MLC meetings were maintained by the chart) the Credit Department, and according to CW2, they were electronically Credit department and pulled by Halprin for her auditing function.

available to certain employees at BankAtlantic, including CW2. In addition, she was part of the “distribution list” of people who regularly received electronic copies of the minutes.

65 (not cited by Defendants’ Based on their personal observation as employees of the Bank involved in A. Halprin confirmed that during the class period many of the loans chart) the credit, servicing and closing aspects of CRE loans, CW1 and CW2 in BLB (Builder Land Bank) , LAD (Land Acquisition and

stated that many of the loans in the BLB, LAD and LADC portfolios Development) and LADC (Land Acquisition Development and made during the Class Period were not properly documented and other Construction) portfolios were not properly documented. In conditions of closing were not satisfied. addition, many of the conditions for closing on those loans were

not satisfied.

65 (not cited by Defendants’ According to CW2, it was common practice during the Class Period for A. If key documents were not received, Halprin would hold the



chart) the Major Loan Committee (including defendants A. Levan, Abdo and J. funding, however, there were many times that she was overridden Levan) to override the Credit Department and direct that the loans be (on holding the funding). The override would require “signatures funded anyway despite obvious and known underwriting deficiencies. from committee members” and the money would be funded.

B. Halprin stated that throughout the class period, underwriting deficiencies were clearly documented in internal reports maintained by BankAtlantic called Exception Reports. ...She reiterated that during the class period it was common practice for the committee to blatantly disregard the exception reports altogether. She added that this happened “time and time again.” She added that during the class period their was “blatant” disregard for mandatory procedures and documentation when it came to underwriting commercial real estate loans at the bank. Halprin was asked for more specifics on this and she said “they made it up as they went along.”

69 (not cited by Defendants’ According to CW2, these Class Period underwriting deficiencies were A. When the decision was made to override any facet of the lending chart) clearly documented in internal reports maintained by the Bank titled contract an exception report was immediately generated.

“Exception Reports.” Exception Reports were generated any time a loan contained an underwriting deficiency or any time a lending policy was B. Halprin stated that throughout the class period, underwriting overridden. When these Exception Reports were generated, they included deficiencies were clearly documented in internal reports a list of all current exceptions. maintained by BankAtlantic called Exception Reports.

C. 69 (not cited by Defendants’ As a result of CW2’s duties with respect to the closing and servicing of A. Halprin held the position of Senior Vice President-Loan Servicing chart) loans, CW2 saw all Exception Reports during relevant portions of the and Closing Officer since 2001.

Class Period. B. Halprin confirmed that throughout the class period she saw and

generated exception reports that were circulated to all the members of the Major Loan Committee, the Board of Directors and the Officers of the company. This would have included all of the individual defendants during the class period that Halprin identified by name.

69 (not cited by Defendants’ According to CW2, Exception Reports were disseminated to the A. Exception reports were circulated to all of the executives, chart) Individual Defendants during the Class Period, including at Major Loan including but not limited to, Jim White, Alan Levan, Valerie

Committee meetings attended by CW2. Based on this personal knowledge Toalson (when she arrived at the company) and Jarrett Levan. As

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during the Class Period, CW2 stated that Exception Reports detailed well as all of the members of the major loan committee. missing documentation and any other underwriting criteria not satisfied, such as missing legal documents related to the collateral backing the loan B. Halprin confirmed that throughout the class period she saw and and title insurance; a failure to obtain advanced deposits; and a failure to generated exception reports that were circulated to all the get the appropriate appraisal documents. CW2 clarified that each members of the Major Loan Committee, the Board of Directors Exception Report contained all past exceptions not resolved, as well as and the Officers of the company. This would have included all of any new exceptions for that month’s loans. the individual defendants during the class period that Halprin

identified by name.

C. Loans would remain on the exception report until the deficiencies were resolved.

D. Halprin had previously told writer that an important condition of the Steeplechase transaction was that the borrower purportedly had $2 million in pre-sold lots. Halprin confirmed that Jack Abdo, Alan Levan and Jarett Levan were completely aware of this condition. Halprin knew this because this unfulfilled requirement appeared immediately on the company’s Exception Report. Pursuant to the bank’s internal Bank policy, and as a material condition of the loan’s approval and closing, the $2 million was required to be placed in escrow at the Bank prior to the loan being funded.

E. Halprin advised that missing appraisal certifications were a common occurrence on BA’s exception reports. She explained that loans that exceeded $5 million would require an appraisal review. According to Halprin, many of these appraisal reviews would reflect a lower value of the property then the initial appraisal. She continued to say that these loans would then appear on the exception report and the appraisal discrepancy would never be rectified. She characterized this on the exception report as “detailed appraisal problems.”

F. Another frequent issue that appeared on BA’s exception report

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was missing legal documents that would secure the property’s collateral. She added that attorneys on the loans “never delivered.”

G. According to Halprin, another frequent issue that caused a loan to appear on the exception report was that the property was missing title insurance.

70 (not cited by Defendants’ According to CW2’s review of these Exception Reports during the Class A. Halprin confirmed that throughout the class period she saw and chart) Period, one tab on the Exception Report tracked “trailing documents.” generated exception reports that were circulated to all the

These were documents that were expected after the closing of a loan. members of the Major Loan Committee, the Board of Directors They would appear as “pending” on the report until they were 90 days and the Officers of the company. This would have included all of past due. At that point they would appear on the Exception Report as the individual defendants during the class period that Halprin delinquent and missing. CW2 elaborated that another tab tracked “day 1 identified by name. exceptions”. These were exceptions where the loan was granted by the Major Loan Committee members, despite certain Company conditions not B. One tab on the exception report tracked “trailing documents.” being satisfied as required by the Company’s internal checklist in These were documents that were expected after the closing of a approving a CRE loan. These exceptions were required to be fulfilled “no loan. They would appear as “pending” on the report until they later then 5 days” after the loan closed. When Day 5 would come and the were 90 days past due. At that point they would appear on the exception was not fulfilled, the exception would then appear on the general exception report as delinquent and missing. Exception Report, which was disseminated to the Individual Defendants. As an example of how pervasive these underwriting deficiencies were, C. Another tab tracked “day 1 exceptions.” These were exceptions during the Class Period, the Bank’s own Class Period SEC filings confirm that were agreed upon by the Major Loan Committee even though that for the period ending September 30, 2007, there were only 74 LAD, they were required by the company’s internal checklist in LADC, and BLB loans on the Bank’s books. Of this amount, CW2 approving a commercial real estate loan. These exceptions were recalled that approximately 50%-60% of these loans appeared on the required to be fulfilled “no later then 5 days” after the loan closed. Exception Report at any given time. When Day 5 would come and the exception was not fulfilled. The

exception would then appear on the general exception report.

D. Halprin advised that CRE loans represented the vast majority of the loans that appeared on the exception report. She added that about 60% of BA’s overall CRE portfolio appeared on the exception report in any given month.

71 (not cited by Defendants’ CW2 also stated that loans would remain on the Exception Report until A. The exception reports were circulated via email and paper on a the deficiencies were resolved. During the Class Period, Exception monthly basis...Halprin felt that the problem was that the major

12



chart) Reports were circulated via email and paper on an excel spreadsheet on a loan committee members were responsible for following up on monthly basis to all Bank executives including each of the Individual the exceptions. In turn, they either did not follow-up on the Defendants, as well as the members of the Major Loan Committee and the exceptions in a timely manner or “blatantly disregarded the Board of Directors. The Major Loan Committee was responsible for exceptions all together”...Halprin believes that she may have the follow-up on all exceptions noted in these reports. CW2 elaborated that it written policies regarding exception reports. She added that was common for the Major Loan Committee to not follow-up on the BankAtlantic had been written up in three back-to-back OTS exceptions altogether until BankAtlantic was written up by the OTS in audits for violating policies regarding exception reports. She connection with these exceptions. Nonetheless, no real changes ever came believes the years of those audits were 2004, 2005 and 2006. as a result of the OTS’s involvement during the Class Period.

B. Halprin confirmed that during the class period, the Major Loan Committee was responsible for following-up on all exceptions noted on the exception report. She reiterated that during the class period it was common practice for the committee to blatantly disregard the exception reports altogether.

C. Halprin confirmed that throughout the class period she saw and generated exception reports that were circulated to all the members of the Major Loan Committee, the Board of Directors and the Officers of the company. This would have included all of the individual defendants during the class period that Halprin identified by name.

D. The exception report was a monthly report in the form of an excel spreadsheet. It was circulated on the 15th of the month.

E. Halprin advised that exception report was “typically ignored (by management at BankAtlantic) until the OTS would write them (BankAtlantic) up.”

F. In reaction to the OTS write-ups, Marcia Snyder would hold certain people responsible and but never pursue any changes.

72 (not cited by Defendants’ According to CW2, based on personal knowledge stemming from CW2’s A. Halprin confirmed that throughout the class period she saw and chart) own duties and inclusion on the distribution lists in connection with generated exception reports that were circulated to all the

Exception Reports during the Class Period, the Exception Reports were so members of the Major Loan Committee, the Board of Directors

13



important that they were provided to the Company’s Board of Directors. and the Officers of the company. This would have included all of Accordingly, CW2 stated that Defendant Toalson and White would have the individual defendants during the class period that Halprin reviewed the Exception Reports as participants in the Board of Directors identified by name. In fact, the company’s Board of Directors meetings. In addition, the Exception Reports were incorporated into the would enter the exception report into the minutes of each of their Board’s meeting minutes. As for A. Levan, J. Levan and Abdo, CW2 meetings. elaborated that they were on the monthly distribution list for the Exception Reports, that CW2 was a party to discussions regarding certain B. According to Halprin, Defendants Valerie Toalson and Jim White exceptions on these reports [such as those involving Steeplechase] during would have to review the exception reports in order to comply the Major Loan Committee meetings with these Individual Defendants with Sarbanes Oxley and prior to filing the company’s public and that they were all members of the Board of Directors, where these filings. Both Toalson and White would have to fill-out checklists reports were discussed and made part of the Minutes. based on the exception report. Halprin knew this because she too

had to fill out a checklist based on the exception report.

C. Halprin confirmed that the Steeplechase loan was discussed at Major Loan Committee meetings which were attended by Alan Levan, Jack Abdo and Jarett Levan. She knows this because she often attended these meetings as well as a non-voting participant.

D. Halprin reinforced that the minutes were always entered into the bank’s Board of Director’s meeting minutes. Jack Abdo, Alan Levan and Jarett Levan all sat on the Board of Directors during the class period. Halprin believed that Valerie Toalson and Jim White attended the Board of Directors meetings as well.

74 (not cited by Defendants’ According to CW2, Snyder’s improper loan approval practices were well A. Exception reports were circulated to all of the executives, chart) known to A. Levan, J. Levan and Abdo during the Class Period. In fact, including but not limited to, Jim White, Alan Levan, Valerie

according to CW2 who had knowledge by virtue of CW2s position as a Toalson (when she arrived at the company) and Jarrett Levan. As loan servicing manager, at times during the Class Period, Snyder was well as all of the members of the major loan committee. supervised first by A. Levan, and later by J. Levan. Specifically, Snyder reported directly to A. Levan and then to J. Levan when he was named B. According to Halprin, Snyder initially reported to Alan Levan President of the Company in early in 2007. CW2 added that Snyder was during the class period and then to Jarett Levan when he was “in cahoots” with the Levans and Abdo, when it came to Snyder coercing named President of the company in 2006. the sign-off of incomplete loans. CW2 confirmed that Snyder was just one of the players in the loan environment at BankAtlantic, she was not a C. Halprin advised that Snyder’s loan approval practices were not a

14



“lone ranger employee.” Additionally, the Individual Defendants knew secret to any of them. Halprin added that they were all “in about Snyder’s improper loan approvals by reason of their receipt of cahoots” when it came to Snyder coercing the sign-off of Exception Reports and participation on the Major Loan Committee. exception reports. Halprin confirmed that Snyder was just one of

the players in the loan environment at BankAtlantic. She was not a “lone ranger employee.”

76 (not cited by Defendants’ CW2 also stated that the Company made every effort to avoid reserving A. Writer asked if the loan loss reserves had been properly chart) for problem loans by “moving things around,” including such tactics as: calculated, Halprin said “no” and that there was “no indication of

(1) transferring the loans to Bank subsidiaries because reserves adversely any potential loss on the financials.” Halprin advised that impacted the Bank’s revenue (as was done in the Steeplechase loan); and BankAtlantic’s overall loan loss reserves were “not properly (2) intentionally mischaracterizing CRE loans and placing them in less accounted for.” When asked how she knew this, Halprin risky categories than they should have been in to justify lower reserves so explained that she was primarily looking at reserves when she as not to adversely impact the Bank’s revenue. CW2 witnessed this during scrutinized the financials for her approval. She added that “over the Class Period as part of CW2s duties, which included examining loan time” she became more involved in making sure that loan loss loss reserve-related compliance issues. reserves had been properly accounted for. She went on to say that

BankAtlantic violated GAAP because her analysis of their reserves was based on GAAP. Halprin felt that it was “pretty evident what you need to reserve” for.

B. According to Halprin, BankAtlantic made a effort to “not reserve” by “moving things around.”

C. She explained that they would use tactics such as transferring the loans to some of the bank’s subsidiaries to avoid impacting the bank’s overall revenue (i.e.: Steeplechase) and/or intentionally mischaracterizing the loans and placing them in less risky categories that they should have been in, to justify lower reserves being taken for these loans.

82 (not cited by Defendants’ According to CW2, and based on personal observation at Major Loan A. Halprin went on to say that after Toole and Harvell did their work chart) Committee meetings and a review of Committee meeting minutes, the on the loan, all of the write-ups and recommendations went to

Steeplechase loan was a discussion item at these meetings, which were major loan committee at the bank. attended by A. Levan, Abdo and J. Levan. Following discussion at these B. Halprin confirmed that “Alan Levan and Jack Abdo were meetings, this loan was approved by BankAtlantic’s Major Loan involved in every commercial real estate loan during the class Committee, consisting of A. Levan, J. Levan, and Abdo, and Bank period, especially the very large ones.” executives Marcia Synder, Executive Vice President of Commercial

15



Lending, Jeff Mindling, Senior Vice President and Chief Credit Officer C. Halprin advised that Snyder was a very strong figurehead at the and Jay McClung, Executive Vice President and Chief Risk Officer. company but was continuously supervised by the According to CW2, and based on CW2’s observation as a participant at Levans...According to Halprin, Snyder was sent by the the Major Loan Committee meetings, although Snyder was influential at executives at BankAtlantic to behavioral school on multiple Committee meetings (and at BankAtlantic in general), the ultimate word occasions. on larger loans, such as Steeplechase, rested with the Levans and Abdo.

D. Halprin confirmed that the Steeplechase loan was discussed at Major Loan Committee meetings which were attended by Alan Levan, Jack Abdo and Jarett Levan. She knows this because she often attended these meetings as well as a non-voting participant.

83 (not cited by Defendants’ According to CW2, an important condition of the Steeplechase loan A. In Halprin’s review [of Steeplechase], she was able to see that the chart) approval was that the borrower purportedly had $2 million in “pre-sold contract had a loopholes that made the money required to be put

lots.” Pursuant to internal Bank policy, and as a material condition of the in escrow “non-binding”. Halprin informed Snyder that the loan’s approval and closing, the $2 million was required to be placed in builders had “recourse and there was an escape clause”. Snyder escrow at the Bank prior to closing. That material condition never then instructed to Halprin to “find the money”....Halprin began to happened, but the Bank funded the loan anyway. “look for the money” and she found out that the money was not

there...Mindling asked Halprin (again “under Alan’s directive”) to pull together documents regarding the Steeplechase appraisal and “how the valuer came up with that appraisal.” Halprin was specifically asked to go back and show them (the members of the Major Loan Committee) “what had transpired on the loan” or if she could “locate” anything. Halprin found “the exact trail” of Steeplechase and “documented” it in a memo. The memo was addressed to Mindling and McClung. The memo detailed “everything that transpired” including the sales, the common principals, the appraisal and “painted the whole pictures.”

B. Halprin had previously told writer that an important condition of the Steeplechase transaction was that the borrower purportedly had $2 million in pre-sold lots. Halprin confirmed that Jack Abdo, Alan Levan and Jarett Levan were completely aware of this condition. Halprin knew this because this unfulfilled requirement appeared immediately on the company’s Exception Report. Pursuant to the bank’s internal Bank policy, and as a material

16



condition of the loan’s approval and closing, the $2 million was required to be placed in escrow at the Bank prior to the loan being funded.

84 (not cited by Defendants’ Because that material condition was never satisfied, an Exception Report A. Halprin added that the exception report stated specifically that the chart) was generated on the very first day the loan was funded. The Exception bank “had not received these monies” and that there was “no

Report specifically noted that the $2 million in escrow monies were never recourse on the loan.” received and the loan was non-recourse. This deficiency in the Steeplechase loan remained in the Exception Reports for approximately B. Previously, Halprin had referred to Steeplechase as appearing on one year into the Class Period, according to CW2, who saw those the exception reports on “day one”, when asked to clarify this, Exception Reports. Halprin explained that by saying “day one” she meant that on the

day that Steeplechase closed.

C. Halprin confirmed that the Steeplechase transaction appeared on the company’s exception report for over a year, which occurred during the class period.

D. The minutes from the MLC meetings were maintained by the Credit department and pulled by Halprin for her auditing function. In addition, she was part of the “distribution list” of people who regularly received electronic copies of the minutes.

85 (not cited by Defendants’ CW2 confirmed that Abdo, A. Levan and J. Levan were fully aware of A. Halprin added that the exception report stated specifically that the chart) this condition not being satisfied. CW2 knows this because the loan was bank “had not received these monies” and that there was “no

discussed in the Committee meetings, this unfulfilled material condition recourse on the loan.” appeared immediately on the Company’s Exception Report and because it remained on each subsequent Exception Report for one year’s time - B. Previously, Halprin had referred to Steeplechase as appearing on including during the Class Period. As detailed above, these Exception the exception reports on “day one”, when asked to clarify this, Reports were seen by “all” (including the Individual Defendants) via Halprin explained that by saying “day one” she meant that on the email transmission on a monthly basis and problem loans on these reports day that Steeplechase closed. were discussed at both the Major Loan Committee meetings and the Board of Directors meetings. C. Halprin confirmed that the Steeplechase transaction appeared on

the company’s exception report for over a year, which occurred during the class period.

D. Halprin confirmed that the Steeplechase loan was discussed at

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Major Loan Committee meetings which were attended by Alan Levan, Jack Abdo and Jarett Levan. She knows this because she often attended these meetings as well as a non-voting participant.

E. These exception reports were seen by “ALL” the individual defendants on a monthly basis at least.

F. Halprin knows for a fact that Alan Levan, Jack Abdo and Jarett Levan were aware of the exception report because they received the report on a monthly basis via email and it was discussed at both the Major Loan Committee meetings and the Board of Directors meetings.

86(not cited by Defendants’ Following the initial funding of the Steeplechase Loan, CW2 recalls that A. In the meantime, Halprin found out that that the committee chart) in late 2005, that the Major Loan Committee approved a “future advance” granted another loan of $1-1.2 million to Tringali right before the

on the Steeplechase loan, for another $1-2 million. articles the came out.

CW2 recalls that this would have needed Major Loan Committee approval B. The exception report that detailed the initial problems with prior to being made. Steeplechase was presented to the Major Loan Committee when

Tringali came back to BankAtlantic for the “second advance.” As previously mentioned, Halprin felt that the committee should have picked up on Tringali’s financial problems and not given him the additional loan. Halprin believed that it was “evident that he was already in trouble.” According to Halprin, when Tringali comes for the future advance, the “exceptions had already been circulated for a year.”

87(not cited by Defendants’ According to CW2, this type of transfer would have been discussed at A. According to Halprin, Alan Levan was the person who authorized chart) Major Loan Committee meetings during the Class Period attended by repossessing the land of loan that had previously been funded by

Abdo, A. Levan and J. Levan and would never be made without A. the bank and moving them into subsidiaries such as Heartwood 7 Levan’s express approval, and with the assistance and guidance of J. ( in the case of Steeplechase) for an inflated loan amount thereby Levan and Abdo. avoiding revealing the true value of the loan on BankAtlantic’s

financial statements.

B. She added that Jack Abdo and Jarett Levan would have been well aware of Alan Levan’s decision to do that and advised him on it.

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In addition, this would have been discussed at the Major Loan Committee meetings.

92 (not cited by Defendants’ According to CW2, shortly after the publicity in the Sarasota Herald- A. Halprin added that after they had “walked” the land, they knew chart) Tribune regarding Steeplechase, Snyder and other Bank executives that they were not going to be able to develop the land in the way

“walked” the property in or around March or April of 2006, and that had been planned. In fact, Halprin recalled them discussing concluded it was not suitable for development. According to CW2, Snyder how there was no potential developments that would “get them concluded the money that had been funded “was gone.” near the money” that had “already been funded” and that the

“money was gone”. 95 (not cited by Defendants’ CW2 identified NatureWalk as another example of a loan that appeared A. According to Halprin, Naturewalk is another example of a chart) on the Exception Reports from the time that it was originated at the end of property that appeared on the exception report from the time that

2005/beginning of 2006. CW2 advised that the NatureWalk loan was in it was originated at the end of 2005, beginning to 2006. the range of $5-7 million. In this instance, CW2 explained that the Company’s internal underwriting policies were overridden because the B. Halprin advised that the company’s internal policy was missing loan documentation was “extensive” and because the loan was overridden because the loan was given to a developer who had given to a developer to build residential homes, who had “no experience” “never built anything before”. She believed this [Naturwalk] was in residential home building. This loan was made after being reviewed by “character lending” because it was given to this builder based on the Major Loan Committee, including A. Levan, J. Levan and Abdo. CW2 personal relationships rather then the builder’s potential to cited “NatureWalk” as another example of “character lending” because it develop the land. was given to the developer based on personal relationships rather than its potential to develop and build on the land. CW2 recalled that the Levans C. Halprin recalled that the Levans and Abdo were well aware of the and Abdo were well aware of the problems with approving this loan but problems with approving this loan but they went with it anyway. they agreed to it anyway. In addition, she believes that Toalson and White knew about the

problems.

D. Naturewalk was approved by the Major Loan Committee.. Halprin believes that the initial loan was in the range of $5-7 million.

E. She explained that the developer had building experience but no experience in the residential building. Naturewalk was the developer’s first residential project. Naturewalk was the

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developer’s first residential project.

F. In addition, to the questionable developers, Halprin advised that the Naturewalk loan had “documentation problems”, problems with the construction loan agreement and construction plans.

100 (not cited by Defendants’ According to CW2, Mindling met with A. Levan and J. Levan regularly A. According to Halprin, Mindling technically reported to Jay chart) and also participated in the Major Loan Committee meetings with the McClung but met with Alan and Jarett Levan regularly. He sat on the

Levans and Abdo for much of the Class Period. Major Loan Committee for much of the class period.

103 (not cited by Defendants’ CW2 likewise personally observed that during the Class Period these A. According to Halprin, these LADC loans were “on everyone’s chart) LADC loans were “on everyone’s radar” and “constantly being re- radar” and “constantly being re-evaluated” by management,

evaluated” by management , including A. Levan, Abdo and J. Levan . including Alan Levan, Jack Abdo and Jarett Levan.

104 (not cited by Defendants’ CW2 also personally observed that BankAtlantic’s BLB Loans were A. Halprin confirmed that BLB loans were also “risky” because land chart) “risky” during the Class Period because land was offered as collateral for was offered as collateral for the loan and that the land was not far

the loan which was not far along in the development process, so the Bank along in the development process so bank was lending money was lending money against the undeveloped land exclusively. against the undeveloped land exclusively.

104 (not cited by Defendants’ According to CW2, these BLB loans were generally granted prior to A. She added that the BLB loans were generally granted to do chart) infrastructure (roads, sewers, utilities, etc.) and as such there were still infrastructure and the “whole payback” was contingent on the

many stages of development before the Company could receive its “whole success of the infrastructure which was “risky”. payback”, which was “risky.”

105 (not cited by Defendants’ According to CW2, compounding the risky nature of these three CRE loan A. Halprin was with BankAtlantic from February 9, 1993 through chart) portfolios was the Bank’s own “blatant” disregard for mandatory March 27, 2007. Halprin held the position of Senior Vice

procedures and documentation when it came to underwriting CRE loans at President-Loan Servicing and Closing Officer since 2001. BankAtlantic – something CW2 witnessed first-hand during the Class Period as a participant in the Committee meetings and as a employee B. She added that during the class period their was “blatant” involved in loan servicing and compliance issues. disregard for mandatory procedures and documentation when it

came to underwriting commercial real estate loans at the bank.

C. She knows this because she often attended these [MLC] meetings

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as well as a non-voting participant.

105 (not cited by Defendants’ Specifically, CW2 recalled that, even though there were certain “safety A. Halprin felt their was “blatant” disregard for procedures and chart) nets” in place, such as loan review, follow-up documentation, exception documents even with “safety nets” in place. She gave the

reporting, business trailing documents, and other documentation required examples of “safety nets” such as loan review, follow-up for CRE loans, as well as a requirement that these documents be followed- documentation, exception reporting, business trailing documents up on regularly, “on quite a number of occasions, those [documents] were and documentation required for the loan. Halprin explained that blatantly disregarded.” In other words, CW2 stated that during the Class these documents need to be followed-up on regularly. She went Period many of the loans in the BLB, LAD and LADC portfolios were on to say that “on quite a number of occasions those (documents) funded despite not being properly documented (a clear underwriting were blatantly disregarded.” deficiency).

B. Halprin confirmed that during the class period many of the loans in BLB (Builder Land Bank) , LAD (Land Acquisition and Development) and LADC (Land Acquisition Development and Construction) portfolios were not properly documented. In addition, many of the conditions for closing on those loans were not satisfied.

105 (not cited by Defendants’ For example, CW2 personally witnessed loans being funding during the A. Another frequent issue that appeared on BA’s exception report chart) Class Period despite missing legal documentation related to the collateral was missing legal documents that would secure the property’s

backing the loan and title insurance. collateral.

B. According to Halprin, another frequent issue that caused a loan to appear on the exception report was that the property was missing title insurance.

105 (not cited by Defendants’ CW2 added that missing appraisal certifications were also a common A. Halprin advised that missing appraisal certifications were a chart) problem for approved loans during the Class Period. Specifically, CW2 common occurrence on BA’s exception reports. She explained

stated from personal knowledge that during the Class Period, any loan that loans that exceeded $5 million would require an appraisal over $5 million required an appraisal review and that many of these review. According to Halprin, many of these appraisal reviews appraisal reviews reflected lower values of the property than the initial would reflect a lower value of the property then the initial appraisal. appraisal.

105 (not cited by Defendants’ CW2 added that these loans would then appear on the Exception Report A. Halprin was with BankAtlantic from February 9, 1993 through

21



chart) and the appraisal discrepancy would never be rectified. In addition, many March 27, 2007. Halprin held the position of Senior Vice of the other conditions for closing on those loans were likewise not President-Loan Servicing and Closing Officer since 2001. satisfied during the Class Period. CW2 and the Individual Defendants had first-hand knowledge of these loans regularly being funded despite B. Halprin confirmed that during the class period many of the loans numerous underwriting deficiencies because all received and discussed in BLB (Builder Land Bank) , LAD (Land Acquisition and the Exception Reports during the Class Period, and because CW2 was Development) and LADC (Land Acquisition Development and charged with compliance and loan closing duties at BankAtlantic in Construction) portfolios were not properly documented. In connection with these loans. addition, many of the conditions for closing on those loans were

not satisfied.

C. Halprin confirmed that throughout the class period she saw and generated exception reports that were circulated to all the members of the Major Loan Committee, the Board of Directors and the Officers of the company. This would have included all of the individual defendants during the class period that Halprin identified by name.

D. She continued to say that these loans would then appear on the exception report and the appraisal discrepancy would never be rectified. She characterized this on the exception report as “detailed appraisal problems”.

105 (not cited by Defendants’ In this capacity, CW2 also observed that throughout the Class Period, the A. She added that throughout the class period, the OTS was regularly chart) OTS routinely investigated and wrote-up BankAtlantic for these kind of investigating and writing up BankAtlantic for these kind of

deficiencies. deficiencies. 119 (not cited by Defendants’ CW2 confirmed that the Company made every effort during the Class A. Halprin confirmed that the Company made every effort during the chart) Period to avoid properly reserving for problematic commercial real estate class period to avoid properly reserving for problematic

loans. commercial real estate loans.

119 (not cited by Defendants’ CW2 explained that during parts of the Class Period the Defendants A. She explained that they would use tactics such as transferring the chart) would use tactics such as transferring the loans to some of the Bank’s loans to some of the bank’s subsidiaries to avoid impacting the

subsidiaries to avoid impacting the Bank’s overall revenue (i.e.: what was bank’s overall revenue (i.e.: Steeplechase) and/or intentionally done with the Steeplechase loan) and/or intentionally mischaracterizing mischaracterizing the loans and placing them in less risky the loans and placing them in less risky categories than they should have categories that they should have been in, to justify lower reserves been in, to justify lower reserves being taken for these loans. being taken for these loans.

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120 (not cited by Defendants’ According to CW2, BankAtlantic’s computation for loan loss reserves A. Halprin responded by saying that loans were classified in a way chart) was based, in part, on the classification of the loans. In other words, loans that benefited the companies bottom-line. More specifically,

in riskier categories required a higher reserve allowance than loans in less Halprin advised that computations for loan loss reserves were risky categories. According to CW2, Bank employees intentionally based on the classification of the loans. Halprin added that there mischaracterized loans into less risky categories, particularly categorizing are specific guidelines as to how to classify loans, both internally loans that should have been in the LAD portfolio into other categories to and based on OTS standards. In turn, what would happen at justify smaller reserves and thus, protecting the bottom line. To further BankAtlantic is that some of the more risky loans would be given explain, CW2 stated that in 2006, during the Class Period, there was an inaccurate codes (collateral and classification). initiative at the Bank to “reallocate, move and redefine” many of the CRE loans. By reclassifying a loan that properly belonged in one category into B. She explained that they would use tactics such as transferring the a lower risk category, the Company could avoid taking all of the reserves loans to some of the bank’s subsidiaries to avoid impacting the that otherwise would have been required. In CW2’s words, these actions bank’s overall revenue (i.e.: Steeplechase) and/or intentionally became a mechanism to “reserve less” and “tinker with the reserves.” By mischaracterizing the loans and placing them in less risky simply manipulating the loan codes, CW2 observed BankAtlantic taking categories that they should have been in, to justify lower reserves these codes and renaming them during the Class Period. CW2 referred to being taken for these loans. this as “stretching” the collateral codes. CW2 stated that A. Levan was aware of this practice during the Class Period as CW2 witnessed A. Levan C. Halprin recalled that in 2006 there was an initiative at the bank to and Jeff Mindling on certain telephone calls discussing the same. From “reallocate, move and redefine” many of the commercial real observation, CW2 believed that this practice became more rampant at the estate loans. Company from 2006 to early 2007, at which time CW2 observed that the collateral codes were being changed on “an everyday basis.” D. What happened at BankAtlantic was that they took the collateral

codes and renamed them. CW2 referred to this as stretching the collateral codes.

E. She believed that this practice became more rampant in her last year at the company (2006-early 2007). When asked how often the collateral codes were being changed, Halprin recalled that in her last year it was happening “on a everyday basis”.

F. When asked how she knew the above information, Halprin advised that she was responsible for pulling the files which she then gave to Mindling.

G. Often, Halprin would bring the information to Mindling who was

23



on the phone with Alan. According to Halprin, initially this was a way for BA to comply with SOX. She went on to say that it became a “mechanism to reserve less and tinker with the reserves”.

121 (not cited by Defendants’ CW2 elaborated that during the Class Period, defendants White and A. They [White and Toalson] did have a role in deciding how chart) Toalson had active roles in deciding how to reserve for different loans. different loans were reserved for. They along with Jay McClung

In fact, according to CW2, they along with Jay McClung, who reported to would have been deciding the company’s loan loss reserves. A. Levan and J. Levan are the individuals who determined the Company’s Halprin referred to them as the “owners of reserves”. loan loss reserves. CW2 referred to White and Toalson as the “owners of reserves” at the Bank. CW2 further confirmed that as “owners of B. When asked if White and/or Toalson would have been aware of reserves” at the Bank, White and Toalson would have been aware of the the switching of collateral codes, Halprin said they would be. She switching of collateral codes. added that White and Toalson should have managing the situation

but its possible that they did not really understand the loan process.

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Donna Loverin (CW#3) FACC Para. Allegation from FACC Quoted Excerpts from Witness Transcript of Interview

66 Confidential Witness #3 (“CW3”), who also worked in the Credit There are several statements throughout the body of the witness interview Department as an analyst and underwriter prior to and during relevant transcript which lead Plaintiffs to believe that prior to and during parts of portions of the Class Period, also confirmed the weaknesses in the Class Period that Ms. Loverin worked in the credit department and/or BankAtlantic’s due diligence efforts during the Class Period. performed credit related functions, including the following:

A. Q: ... speak with former employees like yourself, and just get an idea as to what was going on at the company. A: Umhm. Q: So, would it be for me to ask you a couple of questions? A: Sure. Q: Okay, what did you do over there? A: I was an analyst and also an underwriter. Q: Okay. And did you work in a specific division? A: I did, I worked in the credit department and we serviced both corporate banking and small business. Q: And just for my reference, what were your dates of employment? A: Oh gosh, I was there almost ten years. When did I --- Q: Roughly. A: I left in - two years ago, because that’s when I relocated up here. Q: So you left in ‘06? A: Yeah, so I must have started in February of - must have been - 1996. Q: Okay. A: Because it would have been 10 years, I think, in February, and I left in January. Q: Okay. And, who did you report to while you were there? A: I reported -- I had a lot of bosses. I reported to Jeff Mindling, who’s the credit officer _____________. Indirect I reported to Jay McClung, who at that time was the chief credit officer. I guess he’s the risk officer now. And Mark Lipzi (sp?) was the small business manager. And then we had all the group presidents. So, on any given day, it would depend. I guess, from an annual review point, Jeff Mindling, and Mark Lipzi. Q: And, just so you know, what I’m mostly interested in is their

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commercial lending. A: Right. Pg. 1-2.

B. A: The appraisers were hired. When I was with the small business side, but also we did corporate. Pg. 3.

C. A: So I’m not sure exactly how much he [Bob love – review appraiser] did for the corporate side, because at one - I would say the majority of the time that I underwrote for the commercial banking side, they were pretty much handled by the corporate division, Marcia Snyder’s group, and the um -- Q: Did they have their own underwriters? A: No. We did it for them. Q: Okay. A: But again, they did their own analysis of the project and then we did the financial end of it, based on what we had. But again, it truly - it was a guarantor analysis. It was very weak. Pg. 3-4.

D. Q: What I’m interested in is, specifically, like three different types of loans, which are the land acquisition and development loans, A: Right. Q: the land acquisition, development and construction loans, and also the builder-banker loans. A: Yeah. The A&D loans and construction, yes, I was aware of those. The builder’s loan, builder’s lines, um, I never underwrote them. I might have underwritten a developer’s guarantor analysis, which is typically what the credit department did. Pg. 5.

E. Q: Who did your job in the commercial lending side? A: Who did my job? Q: Yeah, who was like your counterpart in the commercial lending side? A: Well Mark Litzi and I worked together... Pg. 14.

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66 Specifically, as a result of CW3’s position in the Credit Department A. Q: Did they have their own underwriters? during portions of the Class Period, CW3 observed that during the A: No we did it for them...But again, they did their own analysis of Class Period the underwriting due diligence performed by the Credit the project and then we did the financial end of it, based on what we Department was nothing more than a “guarantor analysis,” which had. But again, it truly - it was a guarantor analysis. It was very CW3 characterized as “very weak.” weak.

Pg. 3-4. 100 Further, as a member of the Credit Department, CW3 recalled A. Alan never wanted to hear anything. And if he didn’t like what you

observing, as early as 2004, that BankAtlantic was headed for trouble had to say then he ran you out. The former CFO, Jasper, he ran him on account of its risky lending practices, explaining that “you could out. And that’s when he brought Jim White in, because he didn’t like see everything coming down the pike” and that Defendants “knew the what Jasper had to say. And we said, you know, you could see kind of loans that were going on the books.” everything coming down the pike. This was nothing new. We knew

back in 2004 that this thing was going to come crashing down. Pg. 13.

B. Q: How did you know back in 2004? A: Because we knew the kind of loans that were going on the books. I knew from the small business side, the quality of the loans. Q: Who did your job in the commercial lending side? A: Who did my job? Q: Yeah, who was like your counterpart in the commercial lending side? A: Well Mark Litzi and I worked together – well, Roberta was an analyst at that time. Paul Chandler, who now he works in Orlando, he left BankAtlantic, he was the credit manager at one time. Of course he was totally horrified. He’s a very, very excellent analyst. Pg. 13-14.

C. Q: Do you think there’s any possibility that they could have not known about the other two and known that builder banker was having a problem? A: Well, if they did then you have a real problem, in that they’re missing the whole thing and you can say negligence, stupidity, whatever you want. Q: Right.

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A: I mean, you can’t be that lax or that totally ignorant of your loan portfolios. If you are, you’re not doing your job. Pg. 18.

D. Q: You mentioned yesterday that you said as early as 2004 you thought that they were headed for trouble? A: Yeah. Q: What did you mean by that? A: Just because of the way some of the, um, the deals that, that you saw come in...that there weren’t like a lot of down payments or, um, the credits didn’t look good... I don’t know, they just, they had a high risk level to them, um, or we would talk about, you know, all this economy has to do is take a dive and what’s gonna happen, um, with this stuff...? Because if they were border line going in you knew they weren’t gonna survive if the economy went south. Pg. 30.

E. Q: And so anything she [Marcia Snyder] really did would have been supervised by Alan and known by Alan? A: Well it should have been, because she had very little lending authority. I think maybe half a mil. Because it was a committee. Pg. 47.

F. Q: Right. A: I mean, she would bring the deals in. Yes, she was very vocal about her deals. But she wasn’t, she didn’t make credit decisions. She never made credit decisions. Q: Jeff was making those decisions. And Jay. A: Well, Jeff ... for Marcia _______’s deals it would have been the committee. Q: What about bigger deals? A: Yeah, it would have been committee. Q: It would have been the Major Loan Committee? A: The major, either Officers Loan Committee or Major Loan Committee. Q: Okay. So those all would have been, and Alan sat on those,

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right? A: Oh yeah. Q: And what about Jarrett and Jack Abdo? A: Jack Abdo sat on Major Loan Committee. Jarrett, I think he became part of that after he got working. So that would have probably been – I’m trying to think if he was there in ‘05. He might have sat in on ‘05. I don’t think he had any lending authority. But then afterwards, yeah. Pg. 47.

G. Q: Interesting. Previously you had said that as early as 2004 BankAtlantic was headed for trouble on account of risky lending practices and because of the type of loans that were going on the books. How did you know that? A: Because I was an underwriter and I saw some of the stuff that was approved. And I used to break my opinion to Jeff because I didn’t – I thought some of it was not very good.... Pg. 49.

85 (Defendants’ included Para 85 CW3 brought this to the attention of defendant Abdo to no avail. A. The inclusion of the allegation in the complaint that was dismissed from the Consolidated Amended was in error and accordingly the allegation was removed from the Complaint) First Amended Consolidated Complaint, as Defendants know. 100 CW3 recalled that it was “common knowledge” that the Company had A. Q: I’m trying -- one of the things that I’m a little concerned about is

many large loans on its books that were likely subject to default and that that BankAtlantic may have not taken the proper reserves for economic loss and for which reserves had not been taken. the types of loans that they had, for as risky of loans as they had

on their books. A: Well, I, you know, I’ll be honest with you. I don’t think they

knew how to reserve. Pg. 9.

B. A: ...And we said, you know, you could see everything coming down the pike. This was nothing new. We knew back in 2004 that this thing was going to come crashing down... Pg . 13.

C. Q: But did you ever hear like any of them say like specifically like I can’t believe they’re taking on these loans.

A: Yeah. I did. Q: What did they say?

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A: The exact quote I can remember somebody saying is, this is another, and I won’t name the institution, um, just waiting to happen. So, um, it wasn’t like...

Q: This is another... A: It’s another employee that, that did the review. I mean, it was

common knowledge. For the people that worked in the loan area, you know, I think, everybody... Pg. 21.

101 CW3 further stated that the Individual Defendants knew about A. Q: Do you think there’s any possibility that they could have not problems in all three of the Company’s CRE portfolios. CW3 added known about the other two and known that builder banker was that, with respect to the unusually large amount of loan defaults that having a problem? were disclosed at the end of the Class Period, “there’s no way these A: Well, if they did then you have a real problem, in that they’re loans just all coincidentally imploded in 4 months .” missing the whole thing and you can say negligence, stupidity,

whatever you want. Q: Right. A: I mean, you can’t be that lax or that totally ignorant of your loan

portfolios. If you are, you’re not doing your job. Q: Absolutely. Pg. 18.

B. Q: Mm-hm. Did you ever hear anything about any of the loan, these people reviewing loans that found that any of the commercial loans were risky?

A: Oh, the loan review department, yeah, that was their job, to identify risk Q: But did you ever hear like any of them say like specifically like I can’t believe they’re taking on these loans. A: Yeah. I did. Q: What did they say? A: The exact quote I can remember somebody saying is, this is another, and I won’t name the institution, um, just waiting to happen. So, um, it wasn’t like... Q: This is another...

A: It’s another employee that, that did the review. I mean, it was common knowledge. For the people that worked in the loan area, you know, I think, everybody...

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Q: So it’s your understanding that there’s no way these loans just all coincidentally imploded in 4 months. A: Um, no. And if they did, then you have total incompetence. Because I remember the CEO of SunTrust saying, if the loan goes bad within the first 6 months, you didn’t do your due diligence. And, you know, I mean, that’s reality. Pg. 21.

C. Q: And so anything she [Marcia] really did would have been supervised by Alan and known by Alan? A: Well it should have been, because she had very little lending authority. I think maybe half a mil. Because it was a committee. P. 47.

D. A: I mean, she would bring the deals in. Yes, she was very vocal about her deals. But she wasn’t, she didn’t make credit decisions. She never made credit decisions.

Q: Jeff was making those decisions. And Jay. A: Well, Jeff ... for Marcia _______’s deals it would have been the

committee. Q: What about bigger deals? A: Yeah, it would have been committee. Q: It would have been the Major Loan Committee? A: The major, either Officers Loan Committee or Major Loan

Committee. Q: Okay. So those all would have been, and Alan sat on those, right? A: Oh yeah. Q: And what about Jarrett and Jack Abdo? A: Jack Abdo sat on Major Loan Committee. Jarrett, I think he

became part of that after he got working. So that would have probably been – I’m trying to think if he was there in ‘05. He might have sat in on ‘05. I don’t think he had any lending authority. But then afterwards, yeah. Pg. 47.

E. Q: Interesting. You had previously said that Land Acquisition,

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Development and Construction Loans – LADCs – were risky, and you said that they knew that they were risky.

A: Yeah, I mean... Q: Who’s they, who knew? A: I think Loan Review, the people in Loan Review, in general

conversation, they were high-risk loans. Q: Did the higher-ups know? Did Alan Levan, Jack Abdo? A: They had to know. I mean, I just can’t even believe that anybody in

this day and age wouldn’t have known. I mean, if you didn’t know then you shouldn’t have been in the business. Pg. 51.

102 As an underwriter of loans in the Credit Department, CW3 confirmed A. Q: And you mentioned you thought Land Acquisition and based on personal knowledge that BankAtlantic’s LAD Loans were Construction Loans were the most risky, specifically because of that risky because they were plagued with a number of “construction problem they had in Ocala. related issues,” and because there were rarely any development plans A: Well, I think they’re risky as a general rule, because if you start associated with these loans to increase the value of the land. that project and you can’t finish it and you can’t sell it, and it’s half,

you know, built, or, you know, half of the units are built, then you Specifically, CW3 explained that, “if you start that project and you gotta come in and find a builder to take it. Pg. 17. can’t finish it and you can’t sell it, and it’s half ... built ..., then you gotta come in and find a builder to take it.” Note: The statement regarding the number of “construction related

issues” was inadvertently attributed to CW3 in the FACC. The statement was in fact made by CW6, Mark Meek. Specifically the CW6 witness memo states: Meek was familiar with all the different loans at BankAtlantic. Meek described Land Acquisition and Development loans as the most risky because these types of loans boast a number of “construction related issues.”

103 CW3 also personally observed that BankAtlantic’s LADC Loans were A. Q: Do you know which out of those 3 loans is the most risky? Or also risky and recalled that Defendants were aware of such fact, as the was, at the time -- I mean, hindsight’s 20/20. Company had experienced problems with them in the past. A: Well, I mean, I think the construction, the A&D, acquisition and

development and construction, because I know when I was there, there was a big project in Ocala that went under. Which, you know, they just didn’t - I guess the area was just not ready for. And I was quite surprised, and it was pretty large -- Pg. 6.

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B. Q: Okay. Um, so, the first question I had was something that we talked about yesterday, which was the land acquisition development and construction loans.

A: Mm-hm. Q: And you mentioned you thought Land Acquisition and Construction Loans were the most risky, specifically because of that problem they had in Ocala A: Well, I think they’re risky as a general rule, because if you start that project and you can’t finish it and you can’t sell it, and it’s half, you know, built, or, you know, half of the units are built, then you gotta come in and find a builder to take it. You know, the A&D loans by themselves, basically, you know, you’ve got a vacant piece of land, so you can unload that, yes, you might take a loss, but I think, and I’m just speaking from an industry standard, the way I look at it is, I mean, they’re all risky, the builder lines, everything. But to me, if you’ve got a project half in construction and then you can’t finish it, you don’t have the money or you’re not selling and the bank takes it back, I think that’s a risky deal. P. 17.

A. Q: Interesting. You had previously said that Land Acquisition, Development and Construction Loans – LADCs – were risky, and you said that they knew that they were risky. A: Yeah, I mean... Q: Who’s they, who knew? A: I think Loan Review, the people in Loan Review, in general conversation, they were high-risk loans. Q: Did the higher-ups know? Did Alan Levan, Jack Abdo? A: They had to know. I mean, I just can’t even believe that anybody

in this day and age wouldn’t have known. I mean, if you didn’t know then you shouldn’t have been in the business. Pg. 51.

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Warren Toole (CW#4) FACC Para. Allegation from FACC Quoted Excerpts from Investigator Memorandum of Interview

81 Confidential Witness #4 (“CW4”), is a former Bank employee who has A. Warren Toole, former Senior Vice President of Commercial specific and detailed knowledge about the Bank’s CRE lending Lending and Signatory of the Steeplechase transaction loan practices and underwriting procedures during the Class Period, documents was contacted at his new place of employment on the stemming from CW4’s position as a managerial level employee morning of March 14, 2008. Toole was informed of writer’s directly involved in underwriting commercial loans at BankAtlantic identity and purpose for calling. during at least half of the Class Period. In this capacity, CW4 has particular knowledge of the Steeplechase transaction gained as a B. Toole was with BankAtlantic from November 2000 through managing member of commercial lending at BankAtlantic at the time October 2006. Toole worked out of the Tampa Commercial of the Steeplechase loan. Based on personal knowledge, CW4 detailed Lending Office which was and still is run by Len Harvell. that the loan officer for Steeplechase underwrote the loan without Toole’s title was Senior Vice President of Commercial Lending. Credit Department oversight.

C. Toole advised that he underwrote the deal himself (which is typical at BankAtlantic).

86 CW4 recalled that BankAtlantic did not conduct its own appraisal for A. The land was appraised by Hutchinson appraisers, which was an Steeplechase. Rather, it relied on an appraisal conducted by approved BankAtlantic appraiser. Toole added that Hutchinson “Hutchinson” appraisers for “Columbus Bank”, and later submitted to had done the approval for Columbus Bank and then submitted the BankAtlantic. same appraisal to BankAtlantic since Hutchinson were an

approved appraisal firm.

86 According to CW4, whose job duties allowed CW4 to see the loan A. Toole explained that problems began to emerge as Tringali documents relevant to the Steeplechase loan and who participated in developed the property. Toole advised that in order for Tringali to the Major Loan Committee meeting related to the same, this second develop and sell the land to builders he needed to post bond to “loan” was made because after the initial loan was made, Tringali was Manatee County. In order to do this, Tringali asked BankAtlantic experiencing problems related to the development of the Steeplechase for an additional loan. property. In connection with these problems, Tringali advised the Bank that he needed more money to post a bond to Manatee County and the B. This second loan that Tringali asked for was again approved by Bank complied. CW2 recalls that this would have needed Major Loan the loan review committee. Committee approval prior to being made. This was confirmed by CW4, who indicated from personal knowledge that this new “loan” was again approved by the Major Loan Committee.

97 (not cited by Defendants’ CW2 and CW4, who were both involved in underwriting, servicing A. According to Toole, the usual procedures (at BankAtlantic) were chart) and/or Bank closing practices in connection with CRE loans made followed by Toole and his colleagues. Toole advised that he

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Warren Toole (CW#4) FACC Para. Allegation from FACC Quoted Excerpts from Investigator Memorandum of Interview

during the Class Period during and after the Steeplechase loan, underwrote the deal himself (which is typical at BankAtlantic). confirmed that the underwriting procedures BankAtlantic employed in connection with the Steeplechase transaction were characteristic of the Bank’s practices with numerous other CRE loans in the Bank’s BLB, LAD and LADC portfolios, as described by CW1 above.

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Michael Blevins (CW#5) FACC Para. Allegation from FACC Quoted Excerpts from Investigator Memorandum of Interview

106 Notwithstanding the foregoing lax underwriting standards, and the A. It would then be reviewed by the loan review committee, failure to comply with proper documentation and underwriting comprised of Snyder, Jay McClung, Jeff Mindling, Alan Levan, requirements with respect to CRE loan underwriting, most of these Jarrett Levan and Jack Abdo. loans received rubber-stamp approval from the Major Loan Committee – a fact confirmed by Confidential Witness #5 (“CW5”), a former B. Blevins advised that most of the loans he brought to loan Senior Vice President in one of the Bank’s Commercial Lending committee were approved in his six years at BankAtlantic. Offices involved in managing commercial lending portfolios during the Class Period. CW5 was employed in this capacity during the entire Class Period. Based on his experience as a loan officer most of the C. Blevins never actually met with the committee in person. His loans presented to the Committee were approved. CW5 observed this meetings were always held on a conference call. as a telephonic participant in certain Major Loan Committee meetings, which were comprised of participants including A. Levan, J. Levan, Abdo, Marcia Synder, Jay McClung, and Jeff Mindling.

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Mark Meek (CW#6) FACC Para. Allegation from FACC Quoted Excerpts from Investigator Memorandum of Interview

59 That the Bank’s loan officers underwrote their own CRE loans during A. Meek was with BankAtlantic from December 2002 through parts of the Class Period, and that this alleviated a typical banking December 2005. For his entire tenure, he worked out of “safety net” where separate underwriters conduct due diligence, BankAtlantic’s Tampa Commercial Lending office and reported instead of the loan officers, was also corroborated by Confidential directly to Len Harvell, who was and remains the Senior Vice Witness #6 (“CW6”). CW6 was a loan specialist officer in the President in charge of the Tampa office. commercial real estate department in BankAtlantic’s Tampa Bay loan office during parts of the Class Period, who actively worked on B. Meek explained that each loan was underwritten by a loan officer coordinating the loan process between the customers, attorneys and (like himself). In addition, the loan officer was responsible for the lenders/loan officers. internal investigation of the property.

81 This is corroborated by the fact that CW1 and CW6, as a member of (See above for CW1 Memo corroboration). the credit department and as a loan specialist in the CRE department, respectively, also stated that at BankAtlantic during the Class Period, A. Meek was with BankAtlantic from December 2002 through the loan officers were responsible for underwriting their own loans. December 2005. For his entire tenure, he worked out of

BankAtlantic’s Tampa Commercial Lending office and reported directly to Len Harvell, who was and remains the Senior Vice President in charge of the Tampa office.

B. Meek explained that each loan was underwritten by a loan officer (like himself). In addition, the loan officer was responsible for the internal investigation of the property.

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in re: bankatlantic bancorp, inc. securities litigation 07-cv...

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