Sector Update: Financial
Financial stocks were ending higher Monday with the NYSE Financial Sector Index adding about 0.2% and the S&P Financial 100 Index ahead 0.3%.
In company news, shares of Doral Financial Corp. rose 19% on Monday after the Supreme Court of Puerto Rico agreed to hear a suit filed by the bank holding company against the Commonwealth seeking to recover over $229 million in excess tax payments.
The suit, filed June 5 and disclosed today in a regulatory filing by the company, also names Puerto Rico's Treasury Department and Treasury Secretary Melba Acosta Febo as defendents. The following day, the Supreme Court of Puerto Rico agreed to an expedited hearing and decision for the case, with an evidentiary hearing scheduled no later than Thursday, June 12, and a judgment on or before June 26.
The bank's efforts to recover the overpayments became more urgent after the Federal Reserve in late April ruled it could not include its tax receivables in calculating its Tier 1 capital, effectively reducing that amount by 42% to around $390 million. The FDIC decision sent DRL shares into a steep swoon, falling nearly 81% from a $9.82 a share close on May 1 to an intra-day low of $1.87 on May 8.
The bank said its 2014 operating plans did not include any cash refund. DRL finished the quarter ended March 31 with around $649.73 million in available cash, with DRL adding its liquidity has remained strong through May 31.
DRL shares were up 18.4% in late Monday trading at $4.11 each, earlier climbing to an intra-day high of $4.40 a share. The stock remains down 81.3% over the past 12 months.
In other sector news,
(+) RATE, Agrees to $18 mln settlement in private securities class action suit by investors who bought the company's stock between June 16, 2011 to Oct. 15, 2012. Insurers are expected to fund a substantial portion of the settlement fund.
(-) MGT, Iorquois Capital details $82,250 investment last month, buying 16,500 shares and boosting its stake to 9.9% with 929,915 shares. Also says it's time for change, faulting the firm's "failed leadership."
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