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PFF operates as a holding company for PFF Bank & Trust (the "Bank"), which provides community banking services to individuals and companies in Southern California. The Complaint alleges that the Company and certain of its officers and directors 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 false and misleading statements concerning the Company's financial condition and improper business practices.
The Complaint alleges that defendants concealed the Company's improper lending to borrowers with little ability to repay the amount loaned and failed to inform investors of the impact of changes in the real estate market in San Bernardino and Riverside counties (the "Inland Empire"). As a result of defendants' concealment, PFF's stock traded at artificially inflated levels throughout the Class Period, reaching a high of $35.45 per share in December 2006. On November 21, 2008, after the market closed, the Bank was closed by regulators and taken over by U.S. Bancorp. Following this announcement, PFF's stock declined to $0.01 per share, a total loss for investors.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) PFF's assets contained hundreds of millions of dollars worth of impaired and risky securities, many of which were backed by real estate that was rapidly dropping in value; (b) prior to and during the Class Period, PFF had been extremely aggressive in generating loans, including being heavily involved in offering Home Equity Lines of Credit ("HELOCs"), which would be enormously problematic if the value of residential real estate did not continue to increase; (c) defendants failed to properly account for PFF's real estate loans, failing to reflect impairment in the loans; (d) PFF's business prospects were much worse than represented due to problems in the Inland Empire market, which was a key focus of PFF's business; and (e) PFF had not adequately reserved for loan losses on HELOCs and on other real estate-related assets.
Plaintiff seeks to recover damages on behalf of all purchasers of PFF's common stock during the Class Period (the "Class"). The Plaintiff is represented by Abraham, Fruchter & Twersky, LLP which has extensive experience in securities class action cases, having been ranked among the leading class action law firms in terms of recoveries achieved by a survey of class action law firms conducted by Institutional Shareholder Services.
If you would like to discuss this action or if you have any questions concerning this notice or your rights as a potential class member or lead plaintiff, you may contact: Jack Fruchter or Arthur J. Chen of Abraham, Fruchter & Twersky, LLP at 212-279-5050, or via e-mail at jfruchter@aftlaw.com or achen@aftlaw.com, respectively. If you wish to serve as lead plaintiff, you must move the Court no later than March 6, 2009. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.
Contact: Jack Fruchter, Esq. Arthur J. Chen, Esq. Abraham, Fruchter & Twersky, LLP One Penn Plaza, Suite 2805 New York, New York 10119 Tel.: (212) 279-5050
SOURCE: Abraham, Fruchter & Twersky, LLP
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