Press release from Business Wire
Rigrodsky & Long, P.A. Announces A Securities Fraud Class Action Lawsuit Has Been Filed Against The Cash Store Financial Services, Inc.
Wednesday, July 03, 2013
Rigrodsky & Long, P.A. Announces A Securities Fraud Class Action Lawsuit Has Been Filed Against The Cash Store Financial Services, Inc.12:16 EDT Wednesday, July 03, 2013
WILMINGTON, Del. (Business Wire) -- Rigrodsky & Long, P.A.:
- Do you, or did you, own shares of The Cash Store Financial Services, Inc. (NYSE: CSFS )?
- Did you purchase your shares between November 24, 2010 and May 13, 2013?
- Did you lose money in your investment in The Cash Store Financial Services, Inc.?
- Do you want to discuss your rights?
Rigrodsky & Long, P.A., including former Special Assistant United States Attorney, Timothy J. MacFall, announces that a complaint has been filed in the United States District Court for the Southern District of New York on behalf of all persons or entities that purchased the common stock of The Cash Store Financial Services, Inc. (“Cash Store” or the “Company”) (NYSE: CSFS) between November 24, 2010 and May 13, 2013, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the “Complaint”).
If you purchased shares of Cash Store during the Class Period and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Peter Allocco of Rigrodsky & Long, P.A., 825 East Gate Boulevard, Suite 300, Garden City, NY at (888) 969-4242, by e-mail to firstname.lastname@example.org, or at: http://www.rigrodskylong.com/investigations/the-cash-store-financial-services-inc-csfs.
Cash Store provides consumers with alternative financial products and services, serving everyday people for whom traditional banking may be inconvenient or unavailable. The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company's business, operations and prospects. Specifically, the Complaint alleges that the defendants concealed from the investing public that it overvalued a major loan portfolio it had acquired and understated its liabilities associated with a class action settlement. As a result of defendants' false and misleading statements, the Company's stock traded at artificially inflated prices during the Class Period.
According to the Complaint, on December 10, 2012, the Company revealed that it needed to restate its financial statements and that it had inappropriately accounted for the acquisition of a large loan portfolio in violation of U.S. Generally Accepted Accounting Principles (“GAAP”). Specifically, the Company determined that a $36.8 million premium should have been recorded as an expense. The Company further stated that it was going to restate the fair value of the loans acquired to $50 million from which the Company had paid $116.3 million and that its provision for loan losses for the three month periods ending March 31, 2012 and June 30, 2012 was understated by $3.3 million and $3.7 million, respectively. Significantly, the Company admitted that material weaknesses existed as to the Company's internal controls and that such weaknesses led to the restatement.
The full truth was revealed on May 13, 2013, when the Company announced that it would again have to restate financial results because the previous annual and interim financial results improperly calculated the losses accrued due to a lawsuit settlement. Although every financial statement filed with the U.S. Securities and Exchange Commission estimated liability relating to the lawsuit to be approximately $18 million, in reality the losses were $23.3 million – or approximately 25% higher than previously reported. The Company admitted that its previous financial reports should not be relied upon and that material weaknesses in internal controls for accounting existed during all periods dating back to 2010 .
On these revelations, shares in Cash Store, which traded as high as $17.41 during the Class Period, plummeted to a close of $3.25 on May 14, 2013.
If you wish to serve as lead plaintiff, you must move the Court no later than August 26, 2013. A lead plaintiff is a representative party acting 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. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. 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 an absent class member.
While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.
Attorney advertising. Prior results do not guarantee a similar outcome.
Rigrodsky & Long, P.A.
Timothy J. MacFall, Esquire