Thursday, Feb. 19, 2009 | 9:33 a.m.
A big bank with Las Vegas operations is being sued again over the collapse of its stock price.
The San Diego law firm Coughlin Stoia Geller Rudman & Robbins LLP said today it's pursuing a class-action lawsuit in federal court in Alabama on behalf of shareholders of Colonial BancGroup, owner of Colonial Bank. This is at least the sixth such lawsuit filed in recent weeks against Colonial.
Colonial, with about a dozen Las Vegas branches, has seen its stock price fall from a 52-week high of $13.99 to about 47 cents today because of bad loans and other problems.
Colonial, of Montgomery, Ala., lost $825 million, or $4.11 per share in the fourth quarter ended Dec. 31. For all of 2008, Colonial BancGroup lost $880.5 million vs. a profit of $180.9 million in 2007.
The lawsuit alleges that in 2008 and through January 2009, Colonial made false and misleading statements regarding the company’s business and financial results, concealed its alleged failure to properly account for its troubled loan portfolio and goodwill and failed to disclose key details about its plan to seek federal bailout money.
Colonial has not yet responded to the allegations in the latest suit; but has told the Auburn (Ala.) Plainsman newspaper it plans to assert a strong defense against such claims.
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