NEW YORK, April 29, 2005 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it has filed a Federal Securities fraud class action suit on behalf of all purchasers of the common stock of R&G Financial Corp. ("R&G Financial" or the "Company") (NYSE:RGF) between April 21, 2003 and April 26, 2005, both dates inclusive (the "Class Period").
The action, entitled Reikes v. R&G Financial Corp., Case No. 05 CV 4265, is pending in the United States District Court for the Southern District of New York, and names as defendants, the Company, Chairman, Chief Executive Officer, and director, Victor J. Galan, its Vice Chairman and President, Ramon Prats, and its Executive Vice President, and Chief Financial Officer, Joseph Sandoval. A copy of the Complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.com.
The Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the Complaint alleges that defendants issued a series of materially false and misleading statements contained in press releases and filings with the Securities and Exchange Commission during the Class Period, including: (1) that R&G Financial's earnings quality had been significantly weakened by the Company's use of overly aggressive assumptions to generate gain on sale income, as well as to boost the value it retained in its interest only ("IO") residuals in securitization transactions; (2) that R&G Financial's methodology used to calculate the fair value of its IO residual interests retained in securitization transactions was incorrect and caused the Company to overstate its financial results by at least $50 million; (3) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated during the Class Period.
On March 25, 2005, after the market closed, R&G Financial announced that it would restate its financial results for fiscal years 2003 and 2004. News of this shocked the market. Shares of R&G Financial, on April 26, 2005, fell $8.14 per share, or 35.12 percent, to close at $15.04 on unusually heaving trading volume. After the market closed on April 26, 2005, R&G Financial issued a press release announcing that it was also now subject to an informal SEC probe relating to its restatement announcement.
If you are a member of the class described above, you may, not later than June 27, 2005 move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.