Spector, Roseman & Kodroff, P.C. Announces Class Action Lawsuit Against Coast Financial Holdings, Inc.
April 04 2007 - 12:00PM
Business Wire
The law firm of Spector, Roseman & Kodroff, P.C. announces that
a securities class action lawsuit was commenced in the United
States District Court for the Middle District of Florida, on behalf
of purchasers of the publicly traded securities of Coast Financial
Holdings, Inc. ("Coast Financial" or the "Company") (NASDAQ:CFHI)
between October 28, 2005 through January 19, 2007, inclusive (the
"Class Period"). The Complaint alleges that defendants violated the
federal securities laws by issuing materially false and misleading
statements contained in press releases and filings with the
Securities and Exchange Commission during the Class Period.
Specifically, according to the complaint in order to take advantage
of the housing boom and in particular the fast-growing real estate
market in Southwest Florida, Coast Financial partnered with
Construction Compliance Inc. ("CCI") to lend money to borrowers who
would use the money to construct homes in that area. The plan was
simple: borrowers would put little money down and take out
construction loans in their name that CCI would then use to
construct the properties. CCI would then use the credit line to
construct the properties and pay the interest on the loans. Once
the construction was completed, borrowers would then sell the
property or "flip" it for a quick profit. The Complaint alleges
that, unbeknownst to shareholders, by the start of the Class
Period, Coast Financial had materially increased its exposure to
CCI and its investors and had extended tens of millions of dollars
of credit for the construction of homes in Florida. Given the
then-deteriorating condition of the Florida real estate market, the
Company should have increased its loan loss reserves for this
segment of the business but did not. The Complaint alleges that,
throughout the Class Period, defendants never disclosed all
material facts about its relationship with CCI, the status of CCI's
construction projects or the Company's increasing exposure to CCI.
Furthermore, the Company should have fully disclosed the true risks
associated with this line of business - there were little, if any,
controls placed on the CCI and its ability to withdraw money from
Coast Financial. Ultimately, CCI withdrew tens of millions of
dollars and never completed construction on many homes. If you
purchased Coast Financial securities during the Class Period, you
may, no later than May 21, 2007, move to be appointed as a Lead
Plaintiff in this class action. A Lead Plaintiff is a
representative, chosen by the Court, that acts on behalf of other
class members in directing the litigation. The Private Securities
Litigation Reform Act of 1995 directs Courts to assume that the
class member(s) with the �largest financial interest� in the
outcome of the case will best serve the class in this capacity.
Courts have discretion in determining which class member(s) have
the �largest financial interest,� and have appointed Lead
Plaintiffs with substantial losses in both absolute terms and as a
percentage of their net worth. If you have sustained substantial
losses in Coast Financial securities during the Class Period,
please contact Spector, Roseman & Kodroff, P.C. at
classaction@srk-law.com for a more thorough explanation of the Lead
Plaintiff selection process. If you have relatively small losses,
your ability to participate in any recovery will be protected by
the Lead Plaintiff(s), and you need take no affirmative steps at
this time. If you wish to join this action, please visit
http://www.srk-law.com/dbjoinaclassaction.asp. If you wish to
discuss this action or have any questions concerning this notice or
your rights or interests, please contact plaintiff's counsel Robert
M. Roseman toll-free at 888-844-5862 or via e-mail at
classaction@srk-law.com. For more detailed information about the
firm please visit its website at http://www.srk-law.com. Spector,
Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania,
concentrates its practice in complex litigation including actions
dealing with securities laws, antitrust, contract and commercial
claims. The firm is active in major litigation pending in federal
and state courts throughout the United States. The firm�s
reputation for excellence has been recognized on repeated occasions
by courts which have appointed the firm as lead counsel in numerous
major class actions involving violations of the federal securities
laws and the federal antitrust laws, and consumer fraud. As a
result of the efforts of the firm, and its members, hundreds of
millions of dollars have been recovered through judgments and
settlements on behalf of thousands of defrauded shareholders and
companies.
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