Contact Information: Contact: Lewis Kahn KGS 1-866-467-1400, ext. 106 email: lewis.kahn@kgscounsel.com
KGS Announces Filing of Class Action Lawsuit Against New Century Financial Corp. on Behalf of Purchasers of Series A and Series B Preferred Shares
| Source: Kahn Gauthier Swick, LLC
NEW ORLEANS, LA -- (MARKET WIRE) -- April 5, 2007 -- Kahn Gauthier Swick, LLC ("KGS") has filed
the first class action lawsuit in the United States District Court for the
Central District of California, Southern Division, on behalf of
shareholders who purchased New Century Financial Corp. ("New Century")
Series A Preferred shares, sold in a public offering on June 15, 2005,
and/or Series B Preferred shares, offered on August 16, 2006.
The complaint charges New Century and its entire Board of Directors with
violations of the Securities Act of 1933 §§ 11, 12(a)(2) and 15. The
action charges defendants with strict liability for the false statements
contained in each Registration Statement and Proxy/Prospectus.
On February 7, 2007, New Century announced that it will have to restate its
previously reported financial results to correct errors related to its
application of generally accepted accounting principles, necessary for
reporting allowances for loan repurchase losses. On this news, New
Century's Preferred shares declined precipitously.
Later, on March 2, 2007, New Century also disclosed that the U.S.
Attorney's Office for the Central District of California had notified the
Company that it is conducting a criminal inquiry in connection with trading
in New Century's stock, and its accounting. The following trading day, New
Century's Preferred Shares again declined. On April 2, 2007, New Century
announced that it would file for Bankruptcy protection.
If you are a Series A or Series B Preferred shareholder and wish to serve
as lead plaintiff in the Preferred Shareholders' Action you must move the
Court no later than June 4, 2007. [See SPECIAL NOTICE, below.] Any member
of the purported class may move the Court to serve as lead plaintiff
through counsel of their choice, or may choose to do nothing and remain an
absent class member. If you would like to discuss your legal rights, you
may e-mail or call KGS, without obligation or cost to you. You may contact
Managing Partner Lewis Kahn of KGS direct, toll free 1-866-467-1400, ext.,
106, or email at lewis.kahn@kgscounsel.com. KGS focuses its practice on
securities fraud litigation, and the firm's lawyers have significant
experience working on securities fraud cases that have resulted in
significant recoveries for shareholders. For additional information
regarding KGS, please visit our website at www.kgscounsel.com.
SPECIAL NOTICE: At least 17 Shareholder securities fraud class actions
have been filed by numerous law firms on behalf of purchasers of New
Century common stock (the "Securities Fraud Class Actions") in the open
market between 4/7/06 and 3/2/07, alledging violations of the Securities
Exchange Act of 1934 §§10(b) and 20(a). Pursuant to the Private Securities
Litigation Reform Act ("PSLRA"), the deadline to move the Court to serve as
lead plaintiff in the Securities Fraud Class Action is Tuesday, April 10,
2007. The Securities Fraud Class Actions do not include claims related to
either the Series A or Series B Preferred Share Offerings and, therefore,
KGS believes that these actions are not related to the Preferred
Shareholders' Action. Accordingly, KGS will oppose any related case
designation and will also oppose consolidation of the Preferred
Shareholders' Action with the Securities Fraud Class Actions.
Shareholders, however, must be advised that there is no guarantee that
such consolidation opposition will succeed and, accordingly, to best
preserve and protect your rights, Preferred Shareholders are encouraged to
contact KGS prior to April 10, 2007.