HARTFORD, Conn., March 23, 2007 (PRIME NEWSWIRE) -- The law firm of Schatz Nobel Izard, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Middle District of Florida on behalf of all persons who purchased or otherwise acquired the publicly traded securities of Coast Financial Holdings ("Coast" or the "Company") (Nasdaq:CFHI) between October 28, 2005 and January 19, 2007, inclusive, (the "Class Period").
The Complaint alleges that Coast and certain of its officers and directors violated Federal Securities laws by issuing a series of materially misleading statements relating to the Company's residential loan portfolio. Coast claimed to have significantly increased its residential loan portfolio, but failed to disclose the build up and concentration of loans for residential construction projects that would be undertaken by Construction Compliance, Inc. ("CCI"). Coast lent millions to individuals to build residential homes, and much of this construction was undertaken by a single company, CCI. This increased the risk of loan default by borrowers and the devaluation of Coast's collateral. Coast failed to disclose that risk in any of its public filings and failed to properly reserve for loan losses on its financial statements. Coast and its officers were well aware of the build up of construction contracts with CCI. On January 19, 2007, Coast announced that it would likely suffer an impairment to its loan portfolio because CCI was going out of business and would not complete many of its construction projects. On this news, Coast's stock price fell approximately 50%. Later, Coast disclosed it would add $14 million in loan loss reserves to deal with the CCI problem.
If you are a member of the class, you may, no later than May 21, 2007, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz Nobel Izard, P.C. has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz Nobel Izard, P.C. toll-free at (800) 797-5499, or by e-mail at firm@snlaw.net, or visit our website: www.snlaw.net.