SOURCE: Battle Fleenor Green Winn & Clemmer LLP

February 18, 2009 14:39 ET

Alabama Law Firms Including Battle Fleenor Green Winn & Clemmer LLP Filed First Class Action Against Colonial BancGroup, Inc. for Alleged Tarp Securities Fraud; Persons With Potential Losses Have Important Rights

BIRMINGHAM, AL--(Marketwire - February 18, 2009) - On February 9, 2009, the Alabama law firms of Battle Fleenor Green Winn & Clemmer LLP and Lowe & Grammas LLP, working in conjunction with the firm of Klafter Olsen & Lesser LLP, filed the first securities fraud class action lawsuit against Colonial BancGroup, Inc. ("Colonial") (NYSE: CNB) and certain of its officers in the U.S. District Court for the Middle District of Alabama. The case was filed on behalf of all persons or entities who purchased Colonial common stock or derivatives from December 2, 2008 through January 27, 2009, inclusive (the "Class Period"), and concerns Colonial's misrepresentations in the open market regarding its participation in the Troubled Asset Relief Program ("TARP").

The Complaint alleges that Colonial, which is a bank holding company whose primary business is commercial and consumer banking, submitted applications for TARP capital infusions in November of 2008. On December 2, 2008, Colonial stated that it had received preliminary approval for TARP funding of $550 million in a press release and an SEC filing. The press release also detailed the purported terms of the TARP funding with the United States Treasury Department, including that the government would received preferred stock, as well as warrants to purchase Colonial common stock. In response, Colonial's stock price surged over 50 percent, from its $2 per share close on December 1, 2008 to $3.08 on December 2, 2008.

The Complaint alleges that these statements in Colonial's December 2, 2008 press release and SEC filing were materially misleading because Colonial had been advised that, before it could receive the $550 million in TARP funding, Colonial would be required to raise additional outside capital of $300 million. This condition was not disclosed in the December 2 statements. Defendants belatedly disclosed that critical fact after the markets closed on January 27, 2009. In response, Colonial's stock price plunged from its close of $1.58 on January 27, 2009 to $0.85 the next trading day -- a 46 % drop -- on extraordinary volume exceeding 26 million shares.

If you purchased Colonial's stock or derivatives during the Class Period, you have until April 10, 2009 to move the Court to be appointed a Lead Plaintiff. If you purchased Colonial securities at any time from December 2, 2008 through January 27, 2009 and sustained losses, please contact Battle Fleenor Green Winn & Clemmer LLP at wgreen@bfgwc.com or at 205-722-1015, or Lowe & Grammas LLP at 205-380-2400 or clowe@lowegrammas.com, for a more thorough explanation of the claims that have been asserted against Colonial. Battle Fleenor Green Winn & Clemmer LLP and Lowe & Grammas LLP, working in conjunction with Klafter Olsen & Lesser LLP, have extensive expertise in prosecuting investor, consumer, and shareholder class actions.