NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/doralfinancial/) today announced that a class action has been commenced in the United States District Court for the District of Puerto Rico on behalf of purchasers of Doral Financial Corp. (“Doral” or the “Company”) (NYSE:DRL) common stock during the period between April 2, 2012 and May 1, 2014 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/doralfinancial/. Any member of the putative 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.
The complaint charges Doral and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Doral is headquartered in New San Juan, Puerto Rico, and operates as the bank holding company for Doral Bank, which provides retail banking services to the general public and institutions, primarily in Puerto Rico.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s financial performance and future prospects and failed to disclose adverse facts, including that: (a) the Company had a material weakness in its internal controls over financial reporting and disclosure controls, and that such controls were ineffective; (b) the Company had under-reserved for loan losses; (c) as a result of having under-reserved for loan losses, the Company’s assets were overstated, its expenses were understated, its net income was overstated, and Doral Bank did not meet its Tier I regulatory capital requirements as stated throughout the Class Period and as required by bank regulators to operate the bank; and (d) as a result of the foregoing, defendants knew Doral Bank was undercapitalized and the Company was not on track to achieve the financial results they had led the market to expect during the Class Period.
On March 21, 2013, Doral issued a press release and filed its annual financial report on Form 10-K for the period ended December 31, 2013, disclosing that the Company had been forced to take an increased provision for loan and lease losses in the fourth quarter of 2013, and as a result, the Company was reporting a net loss for its 2013 fourth quarter. In addition, the Company stated that it would be forced to restate its previously reported financial statements. On this news, the price of Doral common stock declined. Then on May 1, 2014, after the close of trading, the Company filed a Current Report on Form 8-K with the SEC disclosing that the Puerto Rican government was disputing whether a purported tax receivable due Doral, which accounted for $289 million of the bank's $679 million of so-called Tier 1 capital as of the end of fiscal 2013, was indeed payable, and that the U.S. Federal Deposit Insurance Corporation (“FDIC”) had advised Doral that it could not include the tax receivable in its Tier 1 capital ratio, rendering the bank significantly undercapitalized. Doral further disclosed that the FDIC had ordered Doral to revise its capital plan, which it stated could force the Company to sell assets. On this news, the price of Doral common stock, which had traded as high as $25 per share in intraday trading during the Class Period, fell to a level approximately 85% from its Class Period high to close at $3.73 per share on May 2, 2014.
Plaintiff seeks to recover damages on behalf of all purchasers of Doral common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller, with more than 200 lawyers in ten offices, represents U.S. and international institutional investors in contingency-based securities and corporate litigation. The firm has obtained many of the largest securities class action recoveries in history, including the largest jury verdict ever in a securities class action. Please visit http://www.rgrdlaw.com for more information.