Shareholders Sue New York Community Bancorp as Stock Continues Plunge
Shareholders have filed a class action lawsuit against New York Community Bancorp after the lender reported unexpected commercial real estate loan losses and slashed its dividend, causing its stock price to plummet. The shareholders allege that the bank defrauded them by not disclosing the need to set aside more money for credit losses and cutting its dividend to preserve capital. The lawsuit names the bank's CEO and CFO as defendants. The lender's $260 million fourth-quarter loss and 71% dividend cut have raised concerns about midsized lenders exposed to commercial real estate, as landlords struggle with low occupancy rates due to the pandemic and elevated interest rates make loan refinancing costlier.