SEATTLE, May 17 /PRNewswire/ -- Hagens Berman Sobol Shapiro LLP ("Hagens Berman") announced that a class action has been commenced in the United States District Court for the Western District of Washington on behalf of purchasers of Frontier Financial Corporation ("Frontier") common stock during the period between July 22, 2008 and March 16, 2010, inclusive (the "Class Period"). Hagens Berman is currently investigating whether the Class Period should be expanded through April 30, 2010, the date the bank was placed into receivership by the Federal Deposit Insurance Company.
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If you wish to serve as lead plaintiff, you must move the Court no later than June 14, 2010. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Karl Barth of Hagens Berman at (206) 623-7292, or via e-mail at FTBK@hbsslaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.hbsslaw.com/cases-investigations/frontier-bank. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Frontier and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Frontier is a financial holding company that, prior to the FDIC intervention, provided financial services through its commercial bank subsidiary, Frontier Bank.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results and engaged in improper behavior which harmed Frontier's investors by failing to disclose the extent of seriously delinquent commercial real estate loans and construction and land loans. The Company also failed to adequately and timely record losses for its impaired loans, causing its financial results and its Tier 1 capital ratio to be materially false. As a result of defendants' false and misleading statements, Frontier stock traded at artificially inflated prices during the Class Period, reaching a high of $186.00 per share on September 19, 2008.
In July 2008, the Federal Deposit Insurance Corp ("FDIC") and the state of Washington's Department of Financial Institutions ("DFI") conducted an investigation into Frontier's banking practices and cited Frontier with engaging in certain "unsafe and unsound" practices. In March 2009, Frontier entered into a cease-and-desist order with banking regulators and agreed to take certain corrective actions related to the findings of the July 2008 report by the FDIC and DFI.
Then on March 16, 2010, after the market closed, Frontier announced that it had received a Supervisory Prompt Corrective Action Directive from the FDIC. The FDIC warned that the Company was "critically undercapitalized" which could lead to Frontier being placed into conservatorship or receivership, raising doubt about the ability of the Company to continue as a going concern. Frontier further restated its previously announced fourth quarter and year end 2009 results as the FDIC determined that Frontier's loan loss provision and its valuation adjustment of other real estate owned were understated by $30 million and $3.5 million, respectively. On this news, Frontier's stock dropped $1.35 per share to close at $2.89 per share on March 17, 2010, a one-day decline of nearly 32%, on volume of 710,400 shares.
On April 30, 2010, the FDIC placed Frontier Bank in receivership. When trading in Frontier shares resumed, they immediately dropped to $0.40 per share - a loss of more than 99% from the Class Period highs.
Plaintiff seeks to recover damages on behalf of all purchasers of Frontier common stock during the Class Period (the "Class"), and possibly through April 30, 2010. The plaintiff is represented by Hagens Berman, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
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