HARTFORD, Conn., March 16 LAWFUEL – Class Actions — Shepherd, Finkelman, Miller & Shah, LLC (http://www.sfmslaw.com; e-mail: [email protected]), a law firm with offices in Connecticut, Pennsylvania, New Jersey, Florida, and Wisconsin announces that it has filed a lawsuit seeking class action status in the United States District Court for the Central District of California, on behalf of all persons (the “Class”) who purchased the common stock of
New Century Financial Corp. (Pink Sheets: NEWC) (“New Century” or the
“Company”) between April 7, 2006 and February 7, 2007, inclusive (the
“Class Period”). A copy of the Complaint may be obtained from the Court, or you can call our offices toll free at either 866/540-5505 or 877/891-9880 to speak with an attorney regarding this matter and we will send you a copy of the Complaint.
The Complaint alleges that New Century, Brad A. Morrice, Robert K. Cole and Edward F. Gotschall (the Company’s three co-founders), and officers Patti M. Dodge and Taj S. Bindra (“Defendants”) violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market throughout the Class Period that had the effect of artificially inflating the market price of the Company’s stock.
The Complaint alleges that Defendants misrepresented and/or omitted to
disclose, despite a duty to do so, that the Company, among other things,
was under-reserving for loan losses while conditions in the sub-prime
market were deteriorating, had failed to properly value residual interests in loan securitizations in 2006 and earlier periods, lacked adequate
internal controls, and that New Century’s financial statements were not
prepared in accordance with Generally Accepted Accounting Principles
(“GAAP”). The Complaint further alleges that these false statements caused New Century’s stock to trade at artificially inflated prices during the
Class Period, which the Company’s insiders took advantage of by selling
large quantities of their own shares of New Century stock.
The Class Period ends on February 7, 2007, when New Century announced,
after the market had closed, that it would have to restate its financial
results for the first three quarters of 2006 because of accounting
violations. On this news, New Century’s stock plummeted 36% on February
8th, closing at $19.24 per share. Since then, the Company has announced
that it received a grand jury subpoena regarding its accounting treatment
and insider sales, and that it is the subject of an investigation by the
SEC. On March 13, 2007, New Century’s stock was delisted from the NYSE, and the last reported share price was $1.66. The Company’s shares now trade on the Pink Sheets.
If you purchased New Century stock between April 7, 2006 and February
7, 2007, inclusive, you may qualify to serve as lead plaintiff on behalf of the Class. All motions for appointment as lead plaintiff must be filed with
the Court by no later than April 10, 2007. Any member of the proposed Class may move the Court to serve as lead plaintiff in this action through
counsel of his or her choice, or may remain an absent class member. There
are certain legal requirements to serve as lead plaintiff, which we would
be pleased to discuss with you. Please contact James E. Miller, Esquire
(866/540-5505; [email protected]), or James C. Shah, Esquire (877/891-
9880; [email protected]), if you would like to discuss this action or have any questions regarding this notice or your rights.
Shepherd, Finkelman, Miller & Shah, LLC (http://www.sfmslaw.com) is a
national law firm that represents investors, including institutions and
individuals, as well as consumers, in class action and other complex
litigation, and maintains offices in Connecticut, Pennsylvania, New Jersey,
Florida, and Wisconsin. The firm’s attorneys have appeared in matters on
behalf of our clients throughout the United States and have been appointed
lead counsel in numerous class actions and corporate governance matters.