PFF Bancorp, Inc. is the holding company for PFF Bank & Trust, which provides community banking services to individuals and companies in Southern California. On November 21, 2008, PFF Bank & Trust was closed by regulators and taken over by U.S. Bancorp. Following this announcement, PFF's stock declined to $0.01 per share, a total loss for investors.
This is a securities class action brought on behalf of those investors in PFF stock, in hopes of recouping some of those losses. swissintime
The securities class action alleges that during the Class Period, PFF Bank & Trust issued materially false and misleading statements regarding PFF Bank & Trust's business and financial results and engaged in improper behavior, which harmed PFF Bank & Trust's customers and investors in its common stock, including lending to borrowers with little ability to repay the amount loaned and failing to inform investors of the impact of changes in the real estate market in San Bernardino and Riverside counties.
As a result of defendants' false statements, PFF Bank & Trust's stock traded at artificially inflated prices and reached a high of $35.45 per share in December 2006. On November 21, 2008, after the market closed, PFF Bank & Trust was closed by regulators and taken over by U.S. Bancorp. Following this announcement, PFF's stock declined to $0.01 per share, a total loss for investors.
PFF Bank & Trust mislead investors when it concealed from the investing public the following:omega replica watches
(a) PFF Bank & Trust's assets contained hundreds of millions of dollars worth of impaired and risky securities, many of which were backed by real estate that was rapidly dropping in value;
(b) PFF Bank & Trust had been extremely aggressive in generating loans, including being heavily involved in offering Home Equity Lines of Credit, which would be enormously problematic if the value of residential real estate did not continue to increase;
(c) PFF Bank & Trust failed to properly account for PFF Bank & Trust's real estate loans, failing to reflect impairment in the loans;
(d) PFF Bank & Trust's business prospects were much worse than represented due to problems in the Inland Empire market, which was a key focus of PFF's business; and
(e) PFF had not adequately reserved for loan losses on HELOCs and on other real estate-related assets.