A Denver law firm has launched an investigation of Colonial Bancgroup over Colonial’s December 2 TARP comments.
Dyer & Berens LLP is the newest firm to enter the Colonial lawsuit sweepstakes. According to a release, “The investigation focuses on the Company’s disclosures concerning its participation in the Troubled Asset Relief Program or “TARP.” On December 2, 2008, Colonial BancGroup announced that it had received preliminary approval for $550 million in funding from the U.S. Treasury Department. In response, the Company’s common stock price skyrocketed, increasing more than 50% per share. Then, on January 27, 2009, the Company shocked investors by belatedly disclosing that the TARP funding was actually contingent upon it increasing its equity by $300 million. Upon this disclosure, Colonial BancGroup’s stock price plummeted more than 45%.”
This comes on the heels of a lawsuit filed on behalf of investors against Colonial Bancgroup over the TARP talk. The lawsuit was announced last night by a DC law firm.
How many more lawyers will get into the Colonial circus? Can Auburn’s most powerful trustee Bobby Lowder survive the nightmare? Whatever you feel about Lowder, you have to feel sorry for the guyâ€”lawyers are worse than the Borg.