Coast Financial (NASDAQ:CFHI)
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From Jul 2019 to Jul 2024
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.