WASHINGTON, Feb. 16 /PRNewswire/ -- Klafter & Olsen LLP announces that it has filed a class action lawsuit in the United States District Court for the Central District of California on behalf of purchasers of the common stock and other securities of New Century Financial Corp. ("New Century" or the "Company") who purchased during the period from May 4, 2006 through February 7, 2007, inclusive (the "Class Period").
The claims against New Century and certain of its officers and directors allege that the defendants violated the federal securities laws by making false and misleading statements and omissions concerning the Company's operations and financial results for the first three quarters of 2006. New Century, a mortgage finance company, makes substantial amounts of residential mortgage loans. It does not hold these loans but sells the loans to banks and investors. The purchasers can require New Century to repurchase loans which become troubled.
On February 7, 2007 the Company shocked the market by announcing that it was going to restate its financial results for the first three quarters of 2006 because the Company had failed to account for all of the re-purchased loans, and had failed to properly reduce the value of the loans repurchased. The Company was forced to admit that its financial statements could no longer be relied upon. As a result of this unexpected news, New Century shares slumped to a 52-week low, plunging $10.92, to close at $19.42 per share a decline of over 36% on extraordinary volume of over 25 million shares. However, before that announcement, Company insiders sold more than $26 million worth of their personal holdings during the Class Period.
If you purchased New Century publicly traded securities during the Class Period (May 4, 2006 -- February 7, 2007), you may, no later than April 10, 2007, move to be appointed as a Lead Plaintiff. A Lead Plaintiff is a representative party that acts on behalf of other class members in directing the litigation. If you have sustained losses on your purchases of New Century publicly traded securities during the Class Period, please contact Klafter & Olsen LLP at http://www.klafterolsen.com/ or call us at 202/261-3553 for a more thorough explanation of the Lead Plaintiff selection process and the claims that can be asserted against New Century.
Klafter & Olsen LLP has extensive expertise in prosecuting investor class actions involving financial fraud and has offices in Washington D.C. and New York. Please visit our website for more information about the Firm.
