NASHVILLE, Tenn., Feb. 2, 2005 (PRIMEZONE) -- Barrett, Johnston & Parsley today announced that a class action has been commenced in the United States District Court for the Middle District of Tennessee on behalf of purchasers of Direct General Corporation ("Direct General") (Nasdaq:DRCT) publicly traded securities during the period between November 4, 2003 and January 26, 2005 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from January 31, 2005. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Timothy L. Miles of Barrett, Johnston & Parsley at 615/244-2202, or via e-mail at tmiles@barrettjohnston.com. 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 Direct General and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Direct General is a financial services holding company whose principal operating subsidiaries provide non-standard personal automobile insurance, term life insurance, premium finance and other consumer products and services through neighborhood sales offices staffed primarily by employee-agents.
The complaint alleges that Direct General's financial statements and defendants' disclosures throughout the Class Period regarding the Company's financial statements were materially false and misleading in that Direct General was failing to properly adjust for loss reserves with respect to a change in the law related to personal injury protection coverage in Florida. Beginning with policies issued on or after October 1, 2003, Florida mandated that the maximum personal injury protection coverage deductible be reduced from $2,000 per occurrence to $1,000 and that the limit be increased to $10,000 in excess of the deductible as opposed to $10,000 less the deductible. On January 26, 2005, Direct General announced that it would be adjusting its loss reserves and changing its reserve analysis. On this news, Direct General's stock price dropped more than 31% on January 27, 2005, on heavy trading volume.
Plaintiff seeks to recover damages on behalf of all purchasers of Direct General publicly traded securities during the Class Period (the "Class"). The plaintiff is represented by Barrett, Johnston & Parsley in Nashville, TN.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca