BOULDER, Colo., Feb. 20, 2009 (GLOBE NEWSWIRE) -- The Shuman Law Firm today announced that it has filed a lawsuit seeking class action status 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") (NYSE:CNB) between January 23, 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 this matter, 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.
The complaint charges Colonial and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Colonial operates as the holding company for Colonial Bank, National Association, which provides commercial banking, wealth management services, mortgage banking, and insurance services in Florida, Alabama, Georgia, Nevada and Texas.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results, and concealed the Company's failure to properly account for its troubled loan portfolio and goodwill. As a result of defendants' false statements, Colonial's stock traded at artificially inflated prices during the Class Period, reaching a high of $16.06 per share in February 2008.
On January 27, 2009, after the market closed, the Company announced its fourth quarter and full year 2008 financial results, including a net loss of $825 million for the quarter due, in substantial part, to a $575 million goodwill impairment charge, a $415 million charge to write off troubled assets and an increase to its loan loss reserve. Colonial further disclosed that its receipt of funds from the U.S. Treasury's Capital Purchase Program was conditioned upon the Company raising an additional $300 million in equity. On this news, Colonial's stock dropped from $1.58 per share on January 27, 2009 to $0.85 per share on January 28, 2009, a one-day decline of over 46% on unusually large volume.
If you are a member of the proposed class, you may, no later than 60 days from February 9, 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.