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Sterling Financial Corporation Hit by Shareholder Lawsuit

 

If you purchased Sterling Financial Corporation (NASDAQ:STSA) publicly traded securities during the period between July 23, 2008 and January 13, 2009, you have certain options and there are strict and short deadlines running. Deadline: February 9, 2010. Those STSA investors and current long term investors should contact the Shareholders Foundation, Inc.

You may contact us by using this form, or by sending an email to mail@shareholdersfoundation.com, or calling us at (858) 779-1554.

Company Name(s): 
Sterling Financial Corporation
Case Name: 
Sterling Financial Corporation Shareholder Class Action 12/11/2009
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: STSA
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
12/11/2009
Class Period Begin: 
07/23/2008
Class Period End: 
01/13/2009
Court of Filing: 
U.S. District Court for the Eastern District of Washington
Deadline To File for Lead: 
02/09/2010
Summary: 

An investor in Sterling Financial Corporation (Public, NASDAQ:STSA) filed a lawsuit in the United States District Court for the Eastern District of Washington on behalf of purchasers of Sterling Financial Corporation (NASDAQ:STSA) publicly traded securities during the period between July 23, 2008 and January 13, 2009, over alleged violations of Federal Securities Laws by Sterling Financial Corp. and others.

According to the complaint the plaintiff alleges that Sterling and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing between July 23, 2008 and January 13, 2009 materially false and misleading statements regarding its business and financial results and by engaging between July 23, 2008 and January 13, 2009 in improper behavior which harmed Sterling Financial’s investors by failing to disclose the extent of seriously delinquent commercial real estate loans and construction and land loans. Sterling Financial Corporation also failed to adequately and timely record losses for its impaired loans, causing its financial results and its Tier 1 capital ratio to be materially false, so the complaint, and as a result of defendants’ false statements, Sterling’s stock traded at artificially inflated prices between July 23, 2008 and January 13, 2009, reaching a high of $14.72 per share on October 1, 2008.

Then, on January 13, 2009, Sterling Financial issued guidance for the fourth quarter and year end 2008, announcing it anticipated reporting a loss for both the fourth quarter and the year ended December 31, 2008. According to Sterling Financial, the loss would be due in substantial part to an anticipated increase in its allowance for loan and lease loss reserves of approximately $230 million and an expected goodwill impairment charge of between $275 million to $325 million. Sterling Financial further announced that it would be suspending its quarterly cash dividend. On this news, so the complaint, Sterling’s stock (STSA) declined $3.05 per share to close at $3.40 per share on January 14, 2009, a one-day decline of 47% on high volume.

Sterling Financial Corporation, located in Spokane, WA, is a bank holding company. Its principal operating subsidiaries are Sterling Savings Bank and Golf Savings Bank. During the year ended December 31, 2008, the principal operating subsidiary of Sterling Savings Bank was INTERVEST-Mortgage Investment Company. Sterling Financial Corp had in 2007 Total Assets of $12.14977billion with a Net Income of $93.29million and in 2008 Total Assets of $12.79072billion with a Net Loss of $335.53million. Shares of Sterling Financial (STSA) traded recently at $0.620 per share, down from its 52weekHigh of $9.18 per share, $14.32 per share in September 2008, $19.41 per share in February 2008, and over $34 per share in 2007.

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