WSB Financial Group, Inc. - Securities Class Action

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Copyright (c) 2001
Stanford Law School

WSB Financial Group, Inc. Summary: According to a press release dated October 14, 2008, the Bank holding company WSB Financial Group Inc said it agreed to settle a securities class action lawsuit for about $4.9 million. The settlement agreement provides for the certification of a class consisting of all persons who purchased the company's common stock pursuant or traceable to its initial public offering completed in December 2006. The insurance policy of the company's officials will contribute about $4.45 million towards the settlement, and had previously contributed about $350,000 towards the company's legal fees. WSB Financial said the agreement contains no admission of fault or wrongdoing by the company or the other defendants.

As summarized by the civil court docket, on November 19, 2007, an order regarding initial disclosures, joint status report and early settlement was entered. A stipulation and proposed order in regards to the consolidation and scheduling by parties was entered on November 29, 2007. On December 31, 2007, a motion to appoint lead plaintiff and the selection of lead counsel was filed. On January 02, 2008, a motion to consolidate cases was entered. Lastly, an order consolidating cases and appointing lead plaintiff and lead counsel was entered on March 10, 2008. On March 25, 2008, a stipulation and proposed order in regards to the defendants’ schedule for filing consolidated complaint and the briefing of motion to dismiss by parties was entered. Just as quickly, a minute order was entered on April 11, 2008 by Judge Richard A. Jones and deadlines were set for the plaintiffs to file their consolidated complaint and the defendants’ filing of motion to dismiss. At the same time, an amended complaint was also filed. However, on May 09, 2008, a motion to dismiss the consolidated class action complaint was filed by the defendants. Judge Jones entered an order to renote the motion to dismiss on June 20, 2008. Lastly, an order granting an agreed motion to continue and to renote the pending motions to dismiss was entered on August 27, 2008.

The original class action lawsuit was filed on behalf of purchasers of the securities of WSB Financial, Inc. after the company initial public offering seeking to pursue remedies under the 1933 Act. The class action on behalf of all persons who purchased WSB shares, issued pursuant to the December 2006 Registration Statement and Prospectus. WSB is the holding company for Westsound Bank, a Bremerton, Wash.-based financial institution that serves the Puget Sound area.

Specifically, the complaint charges WSB, certain of its officers and directors, and the Company's underwriter with violations of the Act. According to the complaint, the company's registration statement for the IPO failed to disclose that the company had been violating certain banking laws and regulations relating to the origination, administration and monitoring of construction and mortgage loans. Due to the company's misleading statements the WSB stock was traded as high as $21 per share during the class period.

The complaint further alleges that beginning in September of 2007 a series of announcements and investigations into the company's lending practices caused the WSB stock to plummet. In late September the company announced that due to the reduced demand of mortgage loans in the market 33 jobs would be eliminated in the mortgage division of the company and, that WSB's executive vice president of sales and lending at Westsound Bank was terminated. As a result stock price fell from $15.30 to $12.40. In a final blow, the company announced that state and federal regulators were looking into possible fraud and misconduct in its real estate lending practices. Within two days of this announcement the company's stock dropped nearly 60 percent, from $11.20 on October 24, 2007 to $4.73 on October 25, 2007.

On November 21, 2008, an Order Preliminarily Approving Settlement And Providing For Notice was entered with the court.

On March 27, 2009, an Order Approving Plan Of Allocation, an Order Awarding Attorneys’ Fees And Reimbursement Of Expenses, and a Final Judgment And Order Of Dismissal were granted by the court.

INDUSTRY CLASSIFICATION:
SIC Code: 6022
Sector: Financial
Industry: Regional Banks

COMPANY/ISSUER NAME:	WSB Financial Group, Inc.
COMPANY/ISSUER TICKER:	WSFG
COMPANY WEBSITE:	http://www.westsoundbank.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Robert McLain, et al. v. WSB Financial Group, Inc., et al.

COURT: W.D. Washington	DOCKET NUMBER: 07-CV-01747
JUDGE NAME: Hon. James L. Robart
DATE FILED: 10/30/2007	SOURCE: Notice of Filing
CLASS PERIOD START: 12/14/2006	CLASS PERIOD END: 10/23/2007
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Hagens Berman Sobol Shapiro LLP (Seattle) 1301 Fifth Avenue, Suite 2900, Seattle, WA, 98101 (voice) 206-623-7292, (fax) 206-623-0594, info@hagens-berman.com Smith & Lowney, PLLC 2317 East John St., Seattle, WA, 98112 (voice) 206.860.2883, (fax) 206.860.4187, info@smithandlowney.com Zwerling Schachter & Zwerling LLP 845 Third Avenue, New York, NY, 10022 (voice) 212-223-3900, (fax) 212-371-5969, inquiry@zsz.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial
Type: Complaint		Date on the document: 10/30/2007
Order Regarding Initial Disclosures, Joint Status Report, And Early Settlement
Type: Order		Date on the document: 11/19/2007
Stipulation And [Proposed] Order Regarding Consolidation And Scheduling
Type: Order		Date on the document: 11/29/2007
Order
Type: Order of Consolidation		Date on the document: 3/10/2008

REFERENCE COMPLAINT

In Re: WSB Financial Group Securities Litgation

COURT: W.D. Washington	DOCKET NUMBER: 07-CV-01747
JUDGE NAME: Hon. Richard A. Jones
DATE FILED: 04/11/2008	SOURCE: Docket
CLASS PERIOD START: 12/21/2006	CLASS PERIOD END: 12/21/2006
TYPE OF COMPLAINT: Consolidated Complaint
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Bernstein Litowitz Berger & Grossmann LLP (San Diego) 12481 High Bluff Drive, Suite 300, San Diego, CA, 92130 (voice) (858) 793.0070, (fax) (858) 793.0323, blbg@blbglaw.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Class Action Complaint For Violations Of The Federal Securities Laws
Type: Complaint		Date on the document: 4/11/2008
Defendant D.A. Davidson & Company's Motion To Dismiss The Claims Pending Against It In The Consolidated Amended Class Action Complaint
Type: Motion		Date on the document: 5/9/2008
WSB Defendants' Motion To Dismiss The Consolidated Class Action Complaint
Type: Motion		Date on the document: 5/9/2008
Lead Plaintiff's Opposition To Defendant D.A. Davidson & Company's Request For Judicial Notice In Support Of Motion To Dismiss
Type: Notice		Date on the document: 6/6/2008
Order Granting Agreed Motion To Continue The Motion Calendar Date For Defendants’ Motions To Dismiss The Consolidated Class Action Complaint
Type: Order		Date on the document: 8/26/2008
Stipulated Motion For Preliminary Approval Of Class Action Settlement
Type: Settlement		Date on the document: 10/15/2008
US District Court Civil Docket
Type: Docket		Date on the document: 10/15/2008
Order Preliminarily Approving Settlement And Providing For Notice
Type: Order		Date on the document: 11/21/2008
Final Judgment And Order Of Dismissal
Type: Order		Date on the document: 03/27/2009
Order Approving Plan Of Allocation
Type: Order		Date on the document: 03/27/2009
Order Awarding Attorneys’ Fees And Reimbursement Of Expenses
Type: Order		Date on the document: 03/27/2009

OTHER DOCUMENTS
Class Action Complaint for Violation of the Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Ronald E. House, et al. v. WSB Financial Group, Inc., et al.
Type: Complaint		Date on the document: 11/08/2007
Class Action Complaint for Violation of the Securities Laws - Demand for Jury Trial
Case Name and/or Number: Sandra Elterich, et al. v. WSB Financial Group, Inc., et al.
Type: Complaint		Date on the document: 11/13/2007

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