AnchorBank has filed suit against one of its Madison loan officers, claiming the employee and two "co-conspirators" manipulated the market for Anchor's stock, causing big fluctuations in the share price and reaping big gains for the trio as other investors lost money.
No dollar amount was cited in the lawsuit, filed in U.S. District Court in Madison on Monday against Clark Hofer, Janesville, accusing him of violating federal and state securities laws and seeking undetermined damages.
Lawyers for AnchorBank have not named the other two people and won't say yet if charges will be filed against them. Hofer is identified in the court complaint as "the mastermind or leader of the group."
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Hofer was hired in December 2006 as vice president of regional lending, according to documents submitted in the case.
The lawsuit alleges that, starting in September 2008, Hofer and two cohorts manipulated a stock-and-cash fund AnchorBank offers its employees as part of its 401(k) retirement plan, forcing the fund's administrator to make large purchases and sales of stock in parent company Anchor BanCorp Wisconsin. The trades prompted share prices to rise or fall as much as 88 percent in a three-day period, the lawsuit says. It says the alleged scheme was uncovered in June.
Hofer also is accused of breaching a non-compete agreement barring him from diverting business from AnchorBank for one year after his employment there ends. Hofer has been on unpaid leave from AnchorBank since July but he took a job in September as a loan officer with Monona Bank, the lawsuit says.
An attempt to reach Hofer at his home was unsuccessful and court documents so far have not identified his attorney.
Anchor BanCorp stock is traded on the Nasdaq market under the symbol ABCW. The stock closed Tuesday at $1.25, up 2 cents.