NEW YORK, April 12, 2007 (PRIME NEWSWIRE) -- Harwood Feffer LLP today announced that a class action suit has been commenced on behalf of all persons who purchased the common stock of Beazer Homes USA, Inc. ("Beazer" or the "Company") (NYSE:BZH) between July 27, 2006 and March 27, 2007, both dates inclusive (the "Class Period").
The action is pending in the United States District Court for the Northern District of Georgia, and names as defendants, the Company as well as certain senior officers and directors. A copy of the complaint can be obtained from the Court or can be viewed on Harwood Feffer web site at www.hfesq.com.
The Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the Complaint alleges that, during the Class Period, the defendants issued materially false and misleading statements regarding the Company's business, management practices, systems and controls, and financial results, and failed to disclose: (i) that the Company lacked proper internal controls over its lending practices; (ii) that the growth in Company's business was primarily the result of its improper lending practices in regards to the low-income borrowers; (iii) that many of the Company's customers would not be able to make payments on their loans after the first two years, which would lead to decreased sales and earnings as well as numerous foreclosures; and (iv) that given the heightened volatility in the lending market, the Company had no reasonable basis upon which to make projections about its 2007 financial results, and as a result, the Company's 2007 projections issued during the Class Period were at the very least reckless. The Complaint further alleges that as result of the foregoing, the Company stock traded at artificially inflated prices throughout the Class Period, reaching a high of $48 per share in December 2006, and the Company's CEO and CFO were able to sell over $9.7 million worth of their Beazer stockholdings.
The defendants' wrongdoing was finally exposed on March 18, 2007, when The Charlotte Observer reported that federal housing officials were conducting an investigation into whether Beazer complied with federal rules in arranging government-insured loans for buyers in its subdivisions. Shortly thereafter, on March 21, 2007, Beazer announced the resignation of its CFO. Subsequently, on March 27, 2007, the Company issued a press release responding to media reports and inquiries into the possibility of a federal investigation of the Company in connection with the alleged mortgage fraud. Upon the announcement, the price of Beazer stock plummeted $2.64 per share, to close on March 28, 2007 at $28.77 per share, a one-day decline of 9% and a 40% decline from its Class Period high of $48 per share.
If you are a member of the class described above, you may, not later than May 29, 2007, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Harwood Feffer, or other counsel of your choice, to serve as your counsel in this action.
Harwood Feffer has taken a leading role in many important actions on behalf of defrauded shareholders, employee investors and consumers and is responsible for hundreds of millions of dollars in recoveries. The Harwood Feffer website (www.hfesq.com) contains detailed information regarding this matter and additional information about the firm.
NOTICE: Although Harwood Feffer has not filed an action against the defendants, you may view a copy of the initial complaint, find more information about this and other matters, and obtain information about your rights by visiting the firm website (www.hfesq.com) or by contacting Jeffrey M. Norton at 877-935-7400 (ext. 286), Tanya Korkhov (ext. 207) or another firm representative.