Contact Information: Contact: Jack Fruchter, Esq. Arthur J. Chen, Esq. Abraham, Fruchter & Twersky, LLP One Penn Plaza, Suite 2805 New York, New York 10119 Tel.: (212) 279-5050
Abraham, Fruchter & Twersky, LLP Files Class Action Suit Against PFF Bancorp, Inc.
| Source: Abraham, Fruchter & Twersky, LLP
NEW YORK, NY--(Marketwire - January 6, 2009) - Abraham, Fruchter & Twersky, LLP filed a class
action lawsuit in the United States District Court for the Central District
of California on behalf of purchasers of the common stock of PFF Bancorp,
Inc. ("PFF" or the "Company") (OTCBB : PFFBQ ) during the period between
October 23, 2006 through November 21, 2008 (the "Class Period").
PFF operates as a holding company for PFF Bank & Trust (the "Bank"), which
provides community banking services to individuals and companies in
Southern California. The Complaint alleges that the Company and certain of
its officers and directors violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
issuing a series of false and misleading statements concerning the
Company's financial condition and improper business practices.
The Complaint alleges that defendants concealed the Company's improper
lending to borrowers with little ability to repay the amount loaned and
failed to inform investors of the impact of changes in the real estate
market in San Bernardino and Riverside counties (the "Inland Empire"). As a
result of defendants' concealment, PFF's stock traded at artificially
inflated levels throughout the Class Period, reaching a high of $35.45 per
share in December 2006. On November 21, 2008, after the market closed, the
Bank was closed by regulators and taken over by U.S. Bancorp. Following
this announcement, PFF's stock declined to $0.01 per share, a total loss
for investors.
According to the complaint, the true facts, which were known by the
defendants but concealed from the investing public during the Class Period,
were as follows: (a) PFF's assets contained hundreds of millions of dollars
worth of impaired and risky securities, many of which were backed by real
estate that was rapidly dropping in value; (b) prior to and during the
Class Period, PFF had been extremely aggressive in generating loans,
including being heavily involved in offering Home Equity Lines of Credit
("HELOCs"), which would be enormously problematic if the value of
residential real estate did not continue to increase; (c) defendants failed
to properly account for PFF's real estate loans, failing to reflect
impairment in the loans; (d) PFF's business prospects were much worse than
represented due to problems in the Inland Empire market, which was a key
focus of PFF's business; and (e) PFF had not adequately reserved for loan
losses on HELOCs and on other real estate-related assets.
Plaintiff seeks to recover damages on behalf of all purchasers of PFF's
common stock during the Class Period (the "Class"). The Plaintiff is
represented by Abraham, Fruchter & Twersky, LLP which has extensive
experience in securities class action cases, having been ranked among the
leading class action law firms in terms of recoveries achieved by a survey
of class action law firms conducted by Institutional Shareholder Services.
If you would like to discuss this action or if you have any questions
concerning this notice or your rights as a potential class member or lead
plaintiff, you may contact: Jack Fruchter or Arthur J. Chen of Abraham,
Fruchter & Twersky, LLP at 212-279-5050, or via e-mail at
jfruchter@aftlaw.com or achen@aftlaw.com, respectively. If you wish to
serve as lead plaintiff, you must move the Court no later than March 6,
2009. Any member of the proposed class may move the Court to serve as lead
plaintiff through counsel of their choice, or may choose to do nothing and
remain a member of the proposed class.