SOURCE: Abraham, Fruchter & Twersky, LLP

March 04, 2010 17:20 ET

Abraham, Fruchter & Twersky, LLP Announces Class Action Lawsuit Against Smithtown Bancorp, Inc.

NEW YORK, NY--(Marketwire - March 4, 2010) -  Abraham, Fruchter & Twersky, LLP announces that a class action law suit has been filed in the United States District Court for the Easter District of New York on behalf of purchasers of common stock of Smithtown Bancorp, Inc. ("Smithtown" or the "Company") (NASDAQ: SMTB) between March 13, 2008 through February 1, 2010 (the "Class Period").

The Complaint alleges that, throughout the Class Period, Smithtown and certain officers and directors violated federal securities laws by failing to disclose materially adverse facts about the Company's true financial condition, business and prospects. The Complaint alleges that the Company failed to disclose: (i) that the Company's financial results were artificially inflated due to SMTB's material understatement of its loan loss reserves and SMTB's failure to state certain of its assets at their true fair value; (ii) that the Company improperly delayed the recognition of its impaired assets in order to inflate its reported income and asset quality; (iii) that the Company's internal and disclosure controls were materially deficient; and (iv) that the Company, through its subsidiary, was engaged in unsafe and/or unsound banking practices.

The alleged material misstatements and omissions caused Smithtown's stock to trade at artificially inflated prices. On February 1, 2010, Smithtown issued a press release announcing its fourth quarter and full year 2009 results, which included a loss of $19.8 million for the fourth quarter of 2009. After this press release became public, Smithtown's stock fell approximately 15% to close at $4.60 per share, causing substantial losses to shareholders. A lawsuit has been filed alleging violations of the Securities and Exchange Act of 1934 seeking recovery from Smithtown and certain of its officers and directors for damages suffered as a result of the officers' mismanagement of the Company. AF&T seeks to recover damages on behalf of shareholders who purchased Smithtown stock during the Class Period. 

Abraham, Fruchter & Twersky, LLP has extensive experience in securities class action cases, and the firm has been ranked among the leading class action law firms in terms of recoveries achieved by a survey of class action law firms conducted by Institutional Shareholder Services. If you would like to discuss this action or if you have any questions concerning this notice or your rights as a potential class member or lead plaintiff, you may contact: Jack G. Fruchter or Arthur J. Chen of Abraham, Fruchter & Twersky, LLP at 212-279-5050, or via e-mail at jfruchter@aftlaw.com or achen@aftlaw.com, respectively. If you wish to serve as lead plaintiff, you must move the Court no later than sixty days from today. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.

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Contact Information

  • Contact:

    Jack G. Fruchter
    Arthur J. Chen
    Abraham, Fruchter & Twersky, LLP
    One Penn Plaza, Suite 2805
    New York, N.Y. 10119
    Telephone: (212) 279-5050