NEW YORK, June 8, 2005 (PRIMEZONE) -- Murray, Frank & Sailer LLP announces that it has filed a class action lawsuit in United States District Court for the Southern District of New York on behalf of all securities purchasers of R&G Financial Corporation (NYSE:RGF) (Berlin:RG1B) between April 21, 2003 and April 25, 2005, inclusive (the "Class Period").
The complaint alleges that during the Class Period R&G and certain of the Company's executive officers issued materially false and misleading financial statements to the investing public regarding its financial performance and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b 5 promulgated thereunder.
R&G Financial is a diversified financial holding company with operations in Puerto Rico and the United States, providing banking, mortgage banking, investments, consumer finance and insurance through its wholly-owned subsidiaries. During the Class Period, defendants made materially false and misleading statements regarding the Company's business and prospects. Unbeknownst to public investors, the true facts, which defendants knew and/or recklessly disregarded and failed to disclose to the investing public during the Class Period, included: (a) that the Company was using fraudulent accounting practices and materially overstated its net income, net gain on mortgage loan sales and net capital; and (b) that the Company was using ineffective risk management and hedging strategies against the increasing risk of rising interest rates. As a result of the defendants' false statements, R&G Financial's stock price traded at inflated levels during the Class Period.
After the market closed on April 25, 2005, the Company issued a press release announcing that it would be reviewing the independent market valuations it had employed in valuing residual interests retained in securitization transactions of the Company. In connection with the review, the Company announced it would be restating its financial results for fiscal years 2003 and 2004 to reflect a reduction in the fair value of its residual interests as of December 31, 2004 by approximately $90 million to $150 million. In response to this announcement, shares of R&G Financial fell 35 percent on April 26, 2005 to close at $15.04. On April 26, 2005, R&G issued a press release announcing that it was the subject of an informal SEC investigation related to its restatement announcement.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or otherwise acquired R&G securities on any world exchange between April 21, 2003 and April 25, 2005, and sustained damages, you may, no later than June 20, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Christopher Hinton of Murray, Frank & Sailer LLP.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.