BOULDER, Colo., Feb. 12, 2009 (GLOBE NEWSWIRE) -- The Shuman Law Firm today announced that a lawsuit seeking class action status has been filed in the United States District Court for the Middle District of Alabama on behalf of a proposed class (the "Class") consisting of all persons or entities who purchased or otherwise acquired the securities of Colonial BancGroup, Inc. ("Colonial" or the "Company") (Nasdaq:CNB) between December 2, 2008 through January 27, 2009, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights and interests with respect to these matters, please contact Kip B. Shuman or Rusty E. Glenn toll free at (866) 974-8626 or email Mr. Shuman at kip@shumanlawfirm.com or Mr. Glenn at rusty@shumanlawfirm.com.
Defendant Colonial is a bank holding company whose primary business is commercial and consumer banking. The Complaint alleges that the Defendants violated the federal securities laws by disseminating materially false and misleading statements contained in a press release and a related filing with the Securities and Exchange Commission concerning the Company's participation in the Troubled Asset Relief Program ("TARP"). Specifically, during the trading day on December 2, 2008, Colonial issued a press release announcing that it had received TARP funding approval for an injection of $550 million. The press release also detailed the purported terms of the TARP funding with the United States Treasury Department including that the government would receive preferred stock as well as warrants to purchase Colonial common stock. In response to that announcement Colonial's stock price surged over 50 percent from its $2 per share close on December 1, 2008 to close at $3.08 per share on December 2, 2008.
However, Defendants failed to disclose that as a prerequisite to receiving $550 million in TARP funding, Colonial would be required to raise additional outside capital of $300 million. Defendants belatedly disclosed that material fact after the markets closed on January 27, 2009. In response to that announcement, Colonial's stock price plunged from its close of $1.58 on January 27, 2009 to $0.85 the next trading -- a 46% drop -- on extraordinarily heavy trading volume exceeding 26 million shares.
If you are a member of the proposed class, you may, no later than April 10, 2009, 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.
The Shuman Law Firm represents investors throughout the nation, concentrating its practice in securities class actions and derivative litigation.
More information on this and other class actions can be found on the Class Action Newsline at www.globenewswire.com/ca/