Four law firms initiated class actions alleging that Coast Financial Holdings Inc. of Bradenton, Fla., issued "materially misleading" statements about its loan portfolio that have caused its stock price to plunge more than 55% since mid-January.
The suits were filed Thursday and Friday on behalf of Coast stockholders who bought shares between Oct. 28, 2005, and Jan. 19, 2007. Two of the suits said shareholders have until May 21 to join; the others did not specify a deadline.
Coast revealed in January that hundreds of its borrowers might have trouble repaying loans for construction of their homes, because of the financial troubles of a single builder. The stock, which had been trading at $16 to $17 a share, fell about 50% in two days and has continued to decline since. The shares closed at $7.12 Friday.
This month Coast announced that it had added $21 million to its loan-loss provision for last year. As a result of the increased, it posted a $17.3 million loss for the year.
The firms that initiated the suits are Brodsky & Smith LLC of Bala Cynwyd, Pa.; Schatz Nobel Izard PC in Hartford, Conn.; Vianale & Vianale LLP of Boca Raton, Fla.; and the Law Offices of Brian M. Felgoise PC of Philadelphia.
