| Company: | NovaStar Financial, Inc. |
| Ticker Symbol: | NYSE: NFI |
| Class Period: | October 29, 2003 to April 11, 2004 |
| Court: | Western District, MO |
| Date Filed: | Apr-15-04 |
| Lead Plaintiff Deadline: | Jun-14-04 |
| Allegations: |
A class action lawsuit was filed on April 15, 2004, on behalf of purchasers of the securities of NovaStar Financial, Inc. ("NovaStar" or the "Company") (NYSE:NFI) between October 29, 2003 and April 11, 2004, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
The action, numbered 04-0334-CV-W-DW, is pending in the United States District Court for the Western District of Missouri, Western Division, against defendants NovaStar, Scott F. Hartman (CEO, Chairman), W. Lance Anderson (President, COO) and Rodney E. Schwatken (Principal Accounting Officer). According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period.
The complaint alleges that throughout the Class Period, NovaStar issued press releases, and filed financial reports with the SEC, reporting record growth on the strength of its core business. Unbeknownst to investors, the complaint charges, the Company's growth had outpaced its ability to maintain compliance with applicable regulations governing its business, thereby subjecting the Company to fines, regulatory action(s) and the serious, but undisclosed, risk that such non-compliance could materially and negatively impact the Company's ability to conduct business. Instead of disclosing these serious risks, and the fact that the Company had already been fined for noncompliance in two states, the Company continued to tout its operational accomplishments to artificially inflate its stock price because it was planning two follow-on equity offerings to raise capital.
The Company's compliance problems were exposed by The Wall Street Journal, in an April 12, 2004 article headlined "Moving the Market -- Tracking the Numbers / Outside Audit: NovaStar's Rise Has Ring of Deja Vu -- Lender's Licensing Woes In Nevada, Other States May Flag Larger Concerns." In response to the announcement, the price of NovaStar common stock plummeted precipitously, closing at $37.50 per share on April 12, 2004, down from $54.18 per share on April 8, 2004 (the last trading day before the disclosure) -- a one day drop of 30.7% on unusually high trading volume.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The action, numbered 04-0334-CV-W-DW, is pending in the United States District Court for the Western District of Missouri, Western Division, against defendants NovaStar, Scott F. Hartman (CEO, Chairman), W. Lance Anderson (President, COO) and Rodney E. Schwatken (Principal Accounting Officer). According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period.
The complaint alleges that throughout the Class Period, NovaStar issued press releases, and filed financial reports with the SEC, reporting record growth on the strength of its core business. Unbeknownst to investors, the complaint charges, the Company's growth had outpaced its ability to maintain compliance with applicable regulations governing its business, thereby subjecting the Company to fines, regulatory action(s) and the serious, but undisclosed, risk that such non-compliance could materially and negatively impact the Company's ability to conduct business. Instead of disclosing these serious risks, and the fact that the Company had already been fined for noncompliance in two states, the Company continued to tout its operational accomplishments to artificially inflate its stock price because it was planning two follow-on equity offerings to raise capital.
The Company's compliance problems were exposed by The Wall Street Journal, in an April 12, 2004 article headlined "Moving the Market -- Tracking the Numbers / Outside Audit: NovaStar's Rise Has Ring of Deja Vu -- Lender's Licensing Woes In Nevada, Other States May Flag Larger Concerns." In response to the announcement, the price of NovaStar common stock plummeted precipitously, closing at $37.50 per share on April 12, 2004, down from $54.18 per share on April 8, 2004 (the last trading day before the disclosure) -- a one day drop of 30.7% on unusually high trading volume.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
If you feel you qualify for damages or remedies that might be awarded in this class action please fill in our form on the right to submit your complaint.
If your injustice does not match the complaint described above, please use this form to register your complaint. Thank you.
