NEW YORK, June 22, 2007 (PRIME NEWSWIRE) -- The New York law firm of Harwood Feffer LLP today announced that it has commenced an investigation concerning Sterling Financial Corp. ("Sterling Financial" or the "Company") (Nasdaq:SLFI) for potential violations of the Employee Retirement Income Security Act ("ERISA") relating to investments in Company stock in the Sterling Financial Corp. 401(k) Retirement Plan (the "Plan") between April 27, 2004 and the present.
In particular, the investigation focuses on whether the Company and certain Plan administrators breached their fiduciary duties of loyalty and prudence to the Plan's participants and beneficiaries under ERISA. In particular, if it is determined that the Plan's fiduciaries breached their duties by: (a) offering and/or continuing to hold Company stock as an investment when it was not prudent to do so; (b) withholding or concealing material information from Plan participants and beneficiaries concerning their investments; and (c) failing to properly monitor the Plan's administration and management, Harwood Feffer intends to pursue an action on behalf of the Plan's participants and beneficiaries harmed by such conduct.
The material facts being investigated include the following. On April 30, 2007, Sterling Financial announced that in its internal investigation the Company had received information suggesting "irregularities in certain financing contracts" at Equipment Finance LLC ("EFI"). As a result, Sterling Financial expected to restate financial statements for the years 2004 through 2006. Recently, on May 24, 2007, Sterling Financial announced that the "previously reported irregularities" at EFI were a "direct result of collusion" by certain EFI employees. The Company stated that as a result, it expects to record a cumulative after-tax charge to the December 31, 2006 financial statements of approximately $145 million to $165 million. A number of class actions have already been filed on behalf of purchasers of the publicly traded shares of Sterling Financial in the United States District Court for the Eastern District of Pennsylvania alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a Plan participant or beneficiary and hold shares of Sterling Financial stock in your Plan account and want to discuss this investigation with an attorney or have any questions concerning this notice, your legal rights or any matter within our expertise, you may e-mail or call Harwood Feffer who will, without obligation or cost to you, attempt to answer your questions. Harwood Feffer has extensive experience in both federal securities and ERISA litigation and has taken a leading role in many important actions on behalf of employees and investors. The Harwood Feffer website (www.hfesq.com) has more information about the firm and information regarding this matter.