DALLAS, April 26, 2005 (PRIMEZONE) -- The law firm of Baron & Budd, P.C. hereby provides notice that a class action lawsuit was filed on behalf of purchasers of Doral Financial Corporation (NYSE:DRL)("Doral" or the "Company") securities during the period between April 9, 2002 and April 18, 2005, inclusive (the "Class Period").
The Complaint alleges that Doral Financial Corporation violated federal securities laws by issuing false or misleading information and that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them. Specifically, the Complaint alleges: (a) that the Company improperly valued Interest Only Strips ("IOs") which caused an overstatement of the Company's financial results by $400-$600 million in fiscal year 2004 alone; (b) that the Company employed a static measure, instead of a forward curve measure, for valuation of its LIBOR sensitive IOs which resulted in misleading results that earnings were increasing and that Doral had a strong mortgage portfolio; (c) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (d) that the Company lacked adequate internal controls and was unable to ascertain the true financial condition of the Company; and (e) that as a result, the value of the Company's earnings and financial results were materially overstated at all relevant times.
On April 18, 2005, the Doral issued a press release revealing that the Company's annual and quarterly financial reports for 2000-2004 were materially false and misleading and would require restatement because of the Company's improper accounting methods employed for the IOs. Additionally, the Company also announced that its accounting practices are the subject of an informal SEC investigation.
The Company's stock has plummeted 66% from its January 18, 2005 closing price of $49.45 to its close on April 18, 2005 at $16.92. The stock closed at $15.09 on April 26, 2005.
If you acquired the securities of Doral Financial Corporation during the Class Period and meet certain legal requirements, you may, no later than June 20, 2005, move for appointment as lead plaintiff on behalf of the proposed class.
If you are a member of this class and would like to take action in this suit, please visit Baron & Budd online www.securitiesactions.com. Information on your legal rights can be obtained by contacting the law firm of Baron & Budd, P.C.
About Baron & Budd, P.C.
Since 1977, the law firm of Baron & Budd, P.C. has championed the rights of people and communities harmed by corporate misconduct. With over 70 attorneys and offices in Texas, Illinois, Ohio, Louisiana, and New York, Baron & Budd enjoys a national reputation as a leader of the plaintiff's bar. The firm represents individuals with mesothelioma and other diseases caused by asbestos; leukemia caused by benzene; injuries caused by other toxic substances and unsafe pharmaceuticals; water authorities seeking clean-up costs for drinking water contamination; securities investors defrauded by corporate wrongdoing; and consumers in class actions. For more information on the firm, call 1-800-222-2766 or visit www.baronandbudd.com.