Two U.S. law firms have launched investigations into the U.K.'s Metro Bank on behalf of investors concerned that the institution committed securities fraud. Reports in The Guardian on Thursday (May 30) said Pomerantz and Levi & Korsinsky, both based in New York, have opened these investigations, joining Glancy Prongay & Murray, which confirmed it launched a probe earlier this month.
According to Pomerantz, the probe "concerns whether Metro Bank, and [certain officers] and/or directors, have engaged in securities fraud or other unlawful business practices." The publication said the two other law firms cited "possible violations of federal securities laws" in their probes.
Earlier this year, Metro Bank revealed an accounting error that kicked off a rocky year for the financial institution (FI), which has included stock value declines and some of its top clients leaving the bank as a result. Reports this week said revelations of the latest probes sent Metro Bank shares down by 10 percent.
In January, the Bank of England discovered that a significant number of commercial loans within the bank were misclassified. Some have since called for CEO Craig Donaldson to resign. In February, the bank was targeted by a cyberattack in which criminals penetrated its customer text messaging system, leading some Metro customers to fall for the fraud. The law firms' probes are now the latest in a string of challenges for the FI.
"It is commonplace in the U.S. for lawyers to issue these sorts of notices soliciting for claimants," said a spokesperson for Metro Bank. "Metro Bank has engaged heavily with investors over the last few months, and their strong support for the business was recently demonstrated in the successful £375 million [nearly $473 million USD] capital raise."