LOS ANGELES, March 7, 2007 (PRIME NEWSWIRE) -- Notice is hereby given that Glancy Binkow & Goldberg LLP has filed a Class Action lawsuit in the United States District Court for the Western District of Missouri on behalf of a class (the "Class") consisting of all persons or entities who purchased or otherwise acquired the common stock of NovaStar Financial, Inc. ("NovaStar" or the "Company")(NYSE:NFI) between May 4, 2006 and February 20, 2007 (the "Class Period").
A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email at info@glancylaw.com, or visit our website at www.glancylaw.com.
The Complaint charges NovaStar and certain of the Company's executive officers and directors with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and dissemination of materially false and misleading statements concerning NovaStar's operations and prospects caused the Company's stock price to become artificially inflated, inflicting damages on investors. NovaStar operates as a specialty finance company that originates, purchases, invests in and services residential nonconforming loans. The Complaint alleges that during the Class Period defendants made materially false and misleading statements to the investing public and misrepresented or failed to disclose adverse facts, including that: (a) the Company lacked requisite internal controls, and, as a result, the Company's projections and reported results issued during the Class Period were based upon defective assumptions about loan delinquencies; (b) the Company's financial statements were materially misstated due to its failure to properly account for its allowance for loan losses; (c) given the deterioration and the increased volatility in the subprime market, the Company would be forced to tighten its underwriting guidelines which would have a direct material negative impact on its loan production going forward; and (d) given the increased volatility in the lending market, the Company had no reasonable basis to make projections about its ability to maintain its Real Estate Investment Trust (REIT) taxable income, which drives dividends, and potentially even its very status as a REIT. As a result, the Company's projections issued during the Class Period about its REIT taxable income and dividends were at a minimum reckless.
As a result of the foregoing, NovaStar shares traded at inflated levels during the Class Period. However, after the above revelations seeped into the market, massive sales of the Company's stock caused NovaStar shares to plummet more than 73% from their Class Period high.
Plaintiff seeks to recover damages on behalf of Class members and is represented by Glancy Binkow & Goldberg LLP, a law firm with significant experience in prosecuting class actions, and substantial expertise in actions involving corporate fraud.
If you are a member of the Class described above, you may move the Court, not later than April 24, 2007, to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224 or by e-mail to info@glancylaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca