San Diego, CA -- (ReleaseWire) -- 05/20/2014 -- An investor, who purchased shares of Doral Financial Corp. (NYSE:DRL), filed a lawsuit in the U.S. District Court for the District of Puerto Rico over alleged violations of Federal Securities Laws by Doral Financial Corp. in connection with certain allegedly false and misleading statements made between April 2, 2012 and May 1, 2014.
Investors who purchased shares of Doral Financial Corp. (NYSE:DRL) have certain options and for certain investors are short and strict deadlines running. Deadline: July 14, 2014. NYSE:DRL investors should contact the Shareholders Foundation at firstname.lastname@example.org or call +1(858) 779 - 1554.
According to the complaint the plaintiff alleges on behalf of all persons or entities who purchased or otherwise acquired securities of Doral Financial Corp. (NYSE:DRL) between April 2, 2012 and May 1, 2014, that the defendants violated Federal Securities Laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
More specifically, the plaintiff claims that between April 2, 2012 and May 1, 2014, defendants issued allegedly materially false and misleading statements regarding Doral Financial Corp’s financial performance and future prospects and failed to disclose adverse facts, including that Doral Financial Corp had a material weakness in its internal controls over financial reporting and disclosure controls, and that such controls were ineffective, that Doral Financial Corp had under-reserved for loan losses, that as a result of having under-reserved for loan losses, the Company’s assets were overstated, its expenses were understated, its net income was overstated, and Doral Bank did not meet its Tier I regulatory capital requirements as stated between April 2, 2012 and May 1, 2014and as required by bank regulators to operate the bank and that as a result of the foregoing, defendants knew Doral Bank was undercapitalized and the Company was not on track to achieve the financial results they had led the market to expect during the Class Period.
Doral Financial Corp. reported that its annual Net Loss increased from $3.30 million in 2012 to $88.29 million in 2013. Shares of Doral Financial Corp. (NYSE:DRL) split 1:20 on June 28, 2013. Since then NYSE:DRL shares declined from $24.75 per share in July 2013 to $8.59 per share in March 2014.
On March 21, 2013, Doral Financial Corp. disclosed that it had been forced to take an increased provision for loan and lease losses in the fourth quarter of 2013, and as a result, the Company was reporting a net loss for its 2013 fourth quarter. In addition, the Company stated that it would be forced to restate its previously reported financial statements.
Then on May 1, 2014, Doral Financial Corp. announced that it is in the process of developing a revised capital plan intended to enable the Company to remain in compliance with the requirements of its regulators Doral Financial Corp. said that among other things, this revised plan is intended to address a recent determination by the Federal Deposit Insurance Corporation (the "FDIC") regarding the treatment of tax receivables from the Government of Puerto Rico. Shares of Doral Financial Corp. (NYSE:DRL) shares declined from $9.82 per share on May 1, 2014, to $2.56 per share on May 7, 2014.
On May 16, 2014, NYSE:DRL shares closed at $2.92 per share.
Those who purchased shares of Doral Financial Corp. (NYSE:DRL) have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
3111 Camino Del Rio North - Suite 423
92108 San Diego