BIRMINGHAM, Ala., Feb. 16 /PRNewswire/ -- Donaldson & Guin, LLC (http://www.donaldsonguin.com/) has filed a class action suit in the U.S. District Court for the Middle District of Alabama against Colonial Bancgroup, Inc. ("CNB" or the "Company") and certain of its officers alleging violations of the Securities Exchange Act of 1934 on behalf of anyone who purchased the common stock of CNB between December 2, 2008 and January 27, 2009 (the "Class").
The Complaint alleges that on December 2, 2008, CNB represented that it would receive $550 million from the U.S. Treasury Department in connection with the Troubled Asset Relief Program ("TARP"). The Complaint further alleges that on January 27, 2009, the Company announced an $825 million loss in the fourth quarter of 2008 and for the first time disclosed that the $550 million it was to receive from TARP was contingent upon CNB's ability to raise an additional $300 million in capital from outside investors (a condition CNB had not yet met). In response to this news, it is alleged that the Company's stock price dropped from $1.58 per share on January 27, 2009, to $0.85 per share on January 28, 2009, a drop of $0.73 per share, or approximately 46%, on unusually heavy trading volume.
The Complaint alleges that the Company's December 2, 2008 press release was materially false and misleading because it failed to disclose that the $550 million that the Company was to receive from TARP was contingent upon the Company's raising $300 million on its own.
If you are a member of the proposed Class, you may move the court no later than April 10, 2009 to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery. For more information about Donaldson & Guin, LLC, or to review a copy of the complaint filed in this action, you may visit our website at http://www.donaldsonguin.com/.
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