Coast Financial Holdings Inc (NASDAQ: CFHI) Investor Securities Class Action Lawsuit 03/20/2007

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Company Name(s): 
Coast Financial Holdings
Case Name: 
Coast Financial Holdings Inc Shareholder Class Action Lawsuit 03/20/2007
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: CFHI
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
03/20/2007
Class Period Begin: 
01/21/2005
Class Period End: 
01/22/2007
Court of Filing: 
U.S. District Court for the Middle District of Florida
Date Settled: 
02/26/2009
Settlement Amount: 
$6,349,000
Deadline to Participate in Settlement: 
07/06/2009
Summary: 

May 29, 2009 - The court approved the settlement, entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and dismissed the action with prejudice.

February 26, 2009 - The court preliminarily approved the settlement.

February 17, 2009 - Parties filed a stipulation of settlement.

June 6, 2008 - The court denied the defendants' motions to dismiss.

April 25, 2008 - The defendants filed an additional motion to dismiss.

April 24, 2008 - The defendants filed a motion to dismiss.

April 2, 2008 - The lead plaintiffs filed a second amended consolidated complaint.

March 13, 2008 - The court granted in part and denied in part the defendants' motions to dismiss.

December 5, 2007 - The defendants filed an additional motion to dismiss.

December 3, 2007 - The defendants filed motions to dismiss.

August 30, 2007 - The lead plaintiffs filed a notice of voluntary dismissal, dismissing 2 individual defendants.

August 24, 2007 - The lead plaintiffs filed an amended consolidated complaint.

June 22, 2007 - The lead plaintiffs and lead counsel were appointed and all cases were consolidated.

May 23, 2007 - Another lead plaintiff motion was filed.

May 21, 2007 - A lead plaintiff motion was filed.

March 23, 2007 - Another investor filed a complaint in the U.S. District Court for the Middle District of Florida on behalf of investors who purchased Coast Financial Holdings Inc (NASDAQ: CFHI) common shares between October 5, 2005 and January 25, 2007.

March 20, 2007 - An investor in shares of Coast Financial Holdings Inc (NASDAQ: CFHI) filed a lawsuit in the U.S. District Court for the Middle District of Florida against Coast Financial Holdings Inc over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between October 28, 2005 and January 19, 2007.

The complaint alleges violations of the Securities Exchange Act of 1934. Between October 28, 2005 and January 19, 2007, Coast Financial Holdings Inc issued a series of statements relating to Coast Financial Holdings Inc’s residential loan portfolio. Coast Financial Holdings Inc claimed to have significantly increased its residential loan portfolio, but failed to disclose the build up and concentration of loans for residential construction projects that would be undertaken by Construction Compliance Inc (CCI). Coast Financial Holdings Inc lent millions to individuals to build residential homes, and much of this construction was undertaken by a single company, CCI. This increased the risk of loan default by borrowers and the devaluation of Coast Financial Holdings Inc’s collateral. Coast Financial Holdings Inc failed to disclose that risk in any of its public filings and failed to properly reserve for loan losses on its financial statements. Coast Financial Holdings Inc and its officers were well aware of the build up of construction contracts with CCI, the complaint alleges. On January 19, 2007, Coast Financial Holdings Inc announced that it would likely suffer an impairment to its loan portfolio because CCI was going out of business and would not complete many of its construction projects. Coast Financial Holdings Inc (NASDAQ: CFHI) stock price fell approximately 50%. Later, Coast Financial Holdings Inc disclosed it would add $14 million in loan loss reserves to deal with the CCI problem.