The Securities and Exchange Commission charged BankAtlantic Bancorp (BBX) and its chief executive Wednesday for allegedly misleading investors on defaulting loans in its real estate development portfolio. The SEC said in a statement BankAtlantic and its CEO and Chairman Alan Levan hid the "deteriorating state" of portions of its land acquisition and development business in 2007. The company and Levan then tried to minimize losses on the books, the SEC said, by committing accounting fraud. The Fort Lauderdale, Fla.-based bank and Levan improperly recorded loans it tried to sell from the portfolio, according to the SEC. The agency filed its complaint in U.S. District Court for the Southern District of Florida. "This is exactly the type of information that is important to investors, and corporate executives who fail to make that required disclosure will face severe consequences," Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement. The SEC seeks to bar Levan from holding an executive position at any financial firm, as well as financial penalties against BankAtlantic. The company's stock fell sharply right before market close Wednesday to $3.03, or by 7.6%. Levan, in a statement, said BankAtlantic "appropriately and correctly reported" its activity and warned investors about risks in its assets as the real estate market nosedived. “While we are sorry that we have a battle to fight, we will focus on the issue at hand and once again successfully see it through," Levan said. "When this case goes to trial, we will have our opportunity to address each and every one of the SEC allegations.” Gene Stearns, a long-time lawyer for BankAtlantic and Levan, said the company is not concerned about the merits of the SEC case, aside from any monetary costs and bad publicity. "We all know the SEC is under enormous pressure to sue somebody, but it sure picked an odd defendant," Stearns said. The loans were for large tracts of land intended for single-family housing and condos, the SEC said. Borrowers could not meet loan obligations, and the SEC said BankAtlantic kept them current in some cases by extending the loan terms. Levan allegedly misled investors on portfolio problems during earnings calls the first half of 2007. BankAtlantic did not disclose any issues until the third quarter of 2007, when it announced an unexpectedly large loss of $29.6 million. The SEC said BankAtlantic tried to sell some of these loans, and hid this from auditors and investors. The bank allegedly understated its net loss for 2007 by more than 10%. Stearns said BankAtlantic disclosed "everything a reasonable investor would want to know completely, totally" and "thoroughly." The company accurately reported problems with the loans early on in 2007, he said, and followed SEC protocol. In a separate case, executives at the company were found guilty in 2010 for failing to disclose information about a real estate portfolio to investors. The court ordered the company to pay $2.41 per share to each shareholder who purchased BankAtlantic common stock between April 26 and Oct. 26, 2007. The South Florida federal court threw out that judgment, Stearns said, and the case is currently on appeal in the 11th U.S. Circuit Court of Appeals. That case, Stearns said, led the SEC investigate BankAtlantic. Eric Bustillo, director of the SEC's Miami office, declined to comment on when the agency opened its inquiry. The SEC investigation continues a busy two months for BankAtlantic after it announced a deal to transfer its retail business to BB&T (BBT). Holders of BankAtlantic debt soured at the deal and filed a lawsuit to block it. The South Florida Business Journal reported a Delaware court blocked a BankAtlantic attempt to dismiss the suit earlier this month. The trial phase in that lawsuit starts Jan. 26, Stearns said. BB&T, based in Winston-Salem, N.C., would pay an estimated premium of $301 million above the net asset value of BankAtlantic. The acquisition would not include non-performing loans and REO properties, which would stay with BankAtlantic. Write to Andrew Scoggin. Follow him on Twitter @ascoggin.