LITTLE ROCK, Ark., Nov. 28, 2001 (PRIMEZONE) -- The Law Firm of Cauley Geller Bowman & Coates, LLP announced today that a class action has been filed in the United States District Court for the Northern District of California on behalf of purchasers of NextCard Inc. ("NextCard" or the "Company") (Nasdaq:NXCD) publicly traded securities during the period between March 30, 2000 and October 30, 2001, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's Website at http://www.classlawyer.com/pr/nextcard.pdf.
The complaint charges NextCard and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants disseminated false and misleading statements concerning the Company's operations and prospects for 2000 and 2001. In fact, defendants knew NextCard's reserves were materially underfunded and that as a result, its 2000 and 2001 projections and/or results were false. During the Class Period, taking advantage of the inflation in NextCard stock, defendants Lent, Cai, Qureshey and Hashman sold almost $9 million worth of their own NextCard stock at artificially inflated prices of as much as $10.89 per share.
Then, on October 31, 2001, it was revealed that, among other things, defendants had concealed that during the Class Period: (a) due to the deteriorating quality of NextCard's portfolio, the Company would need to dramatically increase its reserves for loan losses in fiscal 2000 and Q1, Q2 and Q3 2001 and as a result its reported value of its loans for fiscal 2000 and Q1 and Q2 2001 was overstated; (b) the Company had improperly recorded "credit losses" as "fraud losses" and as a result the Company's "securitization activities" during the Class Period did not qualify for "low level recourse treatment." Defendants knew that as a result, such would dramatically increase the Company bank division's risk weighted assets, and would decrease the Company's "risk based capital ratio" below federal banking guidelines -- rendering the Company "significantly under capitalized"; (c) because the Company's risk-based capital ration had plummeted below acceptable levels, it had been technically subject to a Prompt Correction Action Order and thereby restricted from accepting or reviewing any brokered deposits; (d) as a result of the above, the Company's 2000 and 2001 results and projections were materially false and misleading.
These disclosures shocked the market, causing NextCard's stock to decline to $0.84 per share before closing at $0.87 per share on October 31, 2001 on volume of more than 43 million shares, inflicting millions of dollars of damage on plaintiff and the Class.
If you bought the securities of NextCard between March 30, 2000 and October 30, 2001 inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than December 31, 2001. If you are a member of this class, you can join this class action online at http://www.classlawyer.com/sign_up.html. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller Bowman & Coates, LLP or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller Bowman & Coates, LLP has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Florida, Arkansas and California, but represents investors throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's Website at www.classlawyer.com.
CAULEY GELLER BOWMAN & COATES, LLP Investor Relations Department: Jackie Addison, Sue Null or Shelly Nicholson P.O. Box 25438 Little Rock, AR 72221-5438 Toll Free: 1-888-551-9944 E-mail: info@classlawyer.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.