WILMINGTON, DEL. (CN) – Directors of the Union Bank of California “repeatedly and systematically” let the bank launder “tens of millions of dollars” of drug money, and prosecution for this depressed the share price for an unacceptable buyout offer from the Bank of Tokyo-Mitsubishi, shareholders say in a class action in Chancery Court.
Plaintiffs say Union Bank’s money laundering cost the bank and its shareholders $31.6 million in fines and forfeits.
Plaintiffs say that for years, the bank accept suspicious deposits from Mexican casas de cambio, generated by “multi-ton cocaine sales”.
Federal criminal prosecutors accused the bank of “willfully fail(ing) to establish an adequate anti-money laundering program,” and demanded, and got, $21.6 million in forfeited deposits, plus a $10 million fine.
In this class action, plaintiffs sue the bank’s corporate parent, UnionBanCal, and also sue Tokyo Mitsubishi bank, which offered to buy all the UnionBanCal shares it does not already own for $63 a share.
Plaintiffs say this is an unfair price, “a price depressed, in part, by the wrongdoing committed by the defendants, including members of the company’s board of directors, who also served as senior executives of BTMU (defendant Bank of Tokyo-Mitsubishi UFJ).”
The $63 per share offer is “only an 8.3 percent premium” over UnionBanCal’s closing price on Aug. 11, the day before the announcement of the buyout. “(T)he proposed transaction is an unfair attempt by BTMU to enrich itself to the detriment of UnionBanCal’s public holders, to which it owes fiduciary duties.”
Plaintiffs, led by the Virgin Islands’ Government Employees’ Retirement System, are represented by Seth Rigrodsky with Rigrodsky & Long.