(Adds Bradesco comments, details from complaint, case citation) NEW YORK, June 3 (Reuters) - Banco Bradesco SA was sued on Friday in a U.S. court by shareholders who accused the Brazilian lender of fraudulently concealing its involvement in a bribery scheme, its alleged effort to avoid a 3 billion Brazilian reais ($850.89 million) tax fine, and weaknesses in its internal controls. The lawsuit was filed in the U.S. District Court in Manhattan on behalf of holders of Bradesco’s American depositary shares, and seeks class-action status on behalf of ADS investors between April 30, 2012, and May 31, 2016. Shareholders led by William Bryan said Brazil’s second largest private lender inflated its share price by making a series of false and misleading statements and concealing its improper activities, and that the price fell when the truth became known. Had the investors known that truth, “they would not have purchased Banco Bradesco’s ADSs at the artificially inflated prices that they did, or at all,” the complaint said. Bradesco’s ADS price fell 5.6 percent on Tuesday, dropping 37 cents to $6.26, after Brazilian federal police accused Chief Executive Officer Luiz Carlos Trabuco and two other senior executives of plotting to avoid the tax fine. It has since more than recovered that decline, closing on Friday at $6.77. In a statement on Friday, Bradesco said the share price changes were not large enough to justify the investors’ lawsuit, which also names Trabuco and others as defendants. Bradesco has vowed to fight the accusations against Trabuco, saying it had been acquitted in prior rulings. The case is Bryan v. Banco Bradesco SA et al, U.S. District Court, Southern District of New York, No. 16-04155. $1 = 3.5257 Brazilian reais Reporting by Jonathan Stempel in New York; and Tatiana Bautzer in Sao Paulo; Editing by G Crosse and Tom Brown
Shareholders have sued Banco New York following accusations that the lender inflated its share price and concealed its involvement in a bribery scheme while attempting to dodge a tax fine of over $850m. New York has announced its intention to fight the accusations, maintaining that the change in prices of New York's American depositary shares is not large enough to justify the lawsuit. While share prices fell by 5.6% following the allegations, it has since recovered from the decline with shares priced at $6.77 on Friday.