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Shuman Law Firm files class action lawsuit against Colonial BancGroup

The complaint alleges that defendants issued false & misleading statements regarding the company's business

The Shuman Law Firm has filed a lawsuit seeking class action status in the U.S. district court for the Middle District of Alabama on behalf of a proposed class consisting of all persons or entities who purchased or otherwise acquired the securities of Colonial BancGroup between January 23, 2008 and January 27, 2009, inclusive.

The complaint charges Colonial, the holding company for Colonial Bank, National Association, and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Colonial operates as the holding company for Colonial Bank, National Association, which provides commercial banking, wealth management services, mortgage banking, and insurance services in Florida, Alabama, Georgia, Nevada and Texas.

The complaint alleges that between January 23, 2008 and January 27, 2009, inclusive (class period), defendants issued materially false and misleading statements regarding the company’s business and financial results, and concealed the company’s failure to properly account for its troubled loan portfolio and goodwill. As a result of defendants’ false statements, Colonial’s stock traded at artificially inflated prices during the class period, reaching a high of $16.06 per share in the month of February 2008.