NEWARK, N.J., April 27, 2004 (PRIMEZONE) -- A class action lawsuit was filed by Zimmerman, Levi & Korsinsky, LLP in the United States District Court for the Western District of Missouri on behalf of all purchasers of the securities of Novastar Financial Inc. ("Novastar" or the "Company") (NYSE:NFI), between October 29, 2003 and April 8, 2004, inclusive (the "Class Period").
The Complaint alleges that the defendants violated the federal securities laws. Specifically, the Complaint alleges that each of the defendants knew, yet concealed from the investing public, that the Company was operating branch offices in various states without obtaining the necessary licenses for such branches offices and was conducting business in violation of applicable laws and regulations; the Company's growth through branch office expansions was grossly overstated as these branch offices either did not actually exist or were illegally conducting business in Nevada and elsewhere; and the Company's projected growth would be halted once regulators discovered the defendants' unlawful and sham business practices. In reaction to an April 12, 2004 news article describing NovaStar's failure to comply with state licensing rules, its inflating the number of branch offices in operation and its operating many branch offices illegally, the price of Novastar stock dropped from $54.18 per share to as low as $35.87 per share on a trading volume of 11,556,000 shares. On April 19, 2004, the SEC announced that it has begun an inquiry into NovaStar's business practices. In response the SEC inquiry, the Company's shares continued to plummet to below $32 per share.
If you are a member of the class described above, you may, not later than June 14, 2004 move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. You may retain Zimmerman, Levi & Korsinsky, LLP, or other counsel of your choice, to serve as your counsel in this action.
For more information or to obtain a copy of the complaint and other information in order to join the lawsuit via E-mail or U.S. Mail, please contact:
Eduard Korsinsky, Esq. Zimmerman, Levi & Korsinsky, LLP 39 Broadway, Suite 1440, New York, N.Y. 10006 Tel. (212) 363-7500 Toll Free: (800) 835-4950 Email: ek@zlklaw.com