Coast Financial (NASDAQ:CFHI)
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From Jul 2019 to Jul 2024
Lerach Coughlin Stoia Geller Rudman & Robbins LLP (“Lerach
Coughlin”) (http://www.lerachlaw.com/cases/coastfinancial/)
today announced that a class action lawsuit has been commenced in the
United States District Court for the Middle District of Florida on
behalf of purchasers of Coast Financial Holdings, Inc. (“Coast
Financial” or the “Company”)
(NASDAQ: CFHI) who purchased the publicly traded securities of Coast
Financial between October 5, 2005 to January 25, 2007, inclusive (the “Class
Period”), seeking to pursue remedies under the
Securities Exchange Act of 1934 (the “Exchange
Act”).
If you wish to serve as lead plaintiff, you must move the Court no later
than May 21, 2007. If you wish to discuss this action or have any
questions concerning this notice or your rights or interests, please
contact plaintiff’s counsel, Samuel H. Rudman
or David A. Rosenfeld of Lerach Coughlin at 800/449-4900 or 619/231-1058
or via e-mail at wsl@lerachlaw.com.
If you are a member of this class, you can view a copy of the complaint
as filed or join this class action online at http://www.lerachlaw.com/cases/coastfinancial/.
Any member of the purported class may move the Court to serve as lead
plaintiff through counsel of their choice, or may choose to do nothing
and remain an absent class member.
The complaint charges Coast Financial and certain of its officers and
directors with violations of the Exchange Act. The Company operates as
the holding company for Coast Bank of Florida (“Coast
Bank”) that provides various consumer and
commercial banking services to individuals and small to medium sized
businesses in Manatee, Pinellas and Sarasota counties in Florida.
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.
Unbeknownst to shareholders, however, 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.
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.
Plaintiff seeks to recover damages on behalf of all those who purchased
the publicly traded securities of Coast Financial between October 5,
2005 to January 25, 2007. The plaintiff is represented by Lerach
Coughlin, which has expertise in prosecuting investor class actions and
extensive experience in actions involving financial fraud.
Lerach Coughlin, a 180-lawyer firm with offices in San Diego, San
Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston,
Philadelphia and Seattle, is active in major litigations pending in
federal and state courts throughout the United States and has taken a
leading role in many important actions on behalf of defrauded investors,
consumers, and companies, as well as victims of human rights violations.
Lerach Coughlin lawyers have been responsible for more than $20 billion
in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com)
has more information about the firm.