Hartford, Connecticut, March 16, 2007/PRNewswire/Shepherd, Finkelman, Miller & Shah, LLC Files Class Action Lawsuit Against New Century Financial Corp. – NEWC (Pink Sheets)
Shepherd, Finkelman, Miller & Shah, LLC (http://www.sfmslaw.com), a law firm with offices in Connecticut, Pennsylvania, New Jersey and Florida, 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 at firstname.lastname@example.org or 1-866-540-5505 or James C. Shah at email@example.com or 1-877-891-9880. 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 and Florida. 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.