PL Capital wants Bancorp Rhode Island investigated for possible violations of securities laws

By Lisa Kerner

Charlotte, N.C., June 16 - PL Capital Group's Richard J. Lashley sent a shareholder derivative demand letter on June 11 to Bancorp Rhode Island, Inc.'s board of directors demanding an investigation into possible violations of securities laws and company policies.

The letter was included in a schedule 13D filing with the Securities and Exchange Commission.

In the letter, PL Capital names specifically president and chief executive officer Merrill Sherman, and chief financial officer and treasurer Linda Simmons.

PL Capital, an 8.2% shareholder, also sent a complaint letter to the company's audit committee.

In its complaint, PL Capital asked for a special board committee to investigate whether Sherman and Simmons made "any material omissions or misstatements or selective non-public disclosures to RiskMetrics Group, Inc." or anyone else about the company's projected results, particularly its efficiency ratio, the "scope of the assignment of the investment bank retained by the company" and any other actions "taken in order to improperly influence the outcome of the election of directors at the company's 2008 annual meeting."

PL also wants the investigation to look at whether any such actions by Sherman resulted in her putting her personal interests ahead of the company's and whether Sherman and Simmons violated Regulation FD by making selective disclosure of material non-public information to RiskMetrics and SEC Rule 14a-9 by causing to distributed proxy materials that contained material omissions and misrepresentations.

In May, Bancorp Rhode Island's director nominees were elected to the board over the three nominees put forth by PL Capital.

Directors Anthony F. Andrade, Malcolm G. Chace, Ernest J. Chornyei Jr., Edward J. Mack II and Merrill W. Sherman will remain on the Bancorp Rhode Island board until the 2011 annual meeting, it was previously reported.

PL Capital nominees were Lashley, John Palmer and Daniel J. Mullane.

According to Bancorp Rhode Island, this was the second consecutive year that its director nominees were opposed by PL Capital in a proxy contest.

Bancorp Rhode Island is based in Providence, R.I., and is the holding company for Bank Rhode Island, which provides commercial banking services.

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