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Case Status:    SETTLED
On or around 01/25/2011 (Date of order of distribution of settlement)

Filing Date: April 27, 2005

R&G Financial is a Puerto Rico-chartered, financial holding company that operates R-G Premier Bank of Puerto Rico (Premier Bank) a Puerto Rico commercial bank, and R-G Crown Bank (Crown Bank), a Florida domiciled federal savings bank. The Company also operates R&G Mortgage Corp (R&G Mortgage) in Puerto Rico, The Mortgage Store of Puerto Rico, Inc. (Mortgage Store), a subsidiary of R&G Mortgage and Continental Capital Corp. (Continental), a mortgage-banking subsidiary of Crown Bank, which does business in the continental United States.

The complaint further alleges that on or around March 25, 2005, after the market had closed, R&G Financial announced that it would restate its financial results for fiscal years 2003 and 2004. News of this shocked the market. Shares of R&G Financial, on April 26, 2005, fell $8.14 per share, or 35.12 percent, to close at $15.04, on unusually heavy trading volume. After the market closed on April 26, 2005, R&G Financial issued a press release wherein it announced that it was subject to an informal SEC probe relating to its restatement announcement.

The original complaint charges R&G Financial and certain of its officers with violations of the Securities Exchange Act of 1934. Specifically, the complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that R&G Financial's earnings quality had been significantly weakened by the Company's use of more aggressive assumptions to generate gain on sale income, as well as to the value it retained in its interest only ("IO") residuals in securitization transactions; (2) that R&G Financial's methodology used to calculate the fair value of its IO residual interests retained in securitization transactions was incorrect and caused the Company to overstate its financial results by at least $50 million; (3) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP");(4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times.

On July 28, 2005, the Court entered the Order consolidating the action under Master File 05 cv 4186, under In re R&G Financial Corporation Securities Litigation. The firms of Barrack Rodos & Bacine and Bernstein Litowitz Berger & Grossman LLP, having been selected as counsel by Philadelphia and Detroit, respectively, shall be and hereby are appointed co-lead counsel. All other motions to be appointed lead plaintiff shall be and hereby are denied. On February 27, 2007, a Consolidated Amended Class Action Complaint was filed, and on May 4, 2007, the Defendants responded by filing various motions to dismiss the Consolidated Amended Class Action Complaint. On September 10, 2007, the Court issued the Order denying several of the Defendants’ motions to dismiss the Consolidated Amended Class Action Complaint and reserving the decision on defendant PricewaterhouseCoopers' motion. On October 19, 2007, the Court issued the Order denying defendant PriceWaterhouseCoopers’ motion to dismiss.

According to a press release dated March 3, 2008, R&G Financial Corporation announced that it has reached an agreement in principle to settle all claims with the lead plaintiffs in a shareholder class action originally filed in 2005. Under the terms of the settlement, which is subject to notice being provided to the class and final approval by the United States District Court for the Southern District of New York, the Company and the other settling defendants will pay the plaintiffs an aggregate of $39 million. The Company also announced today that it has reached an agreement in principle to settle all claims in the shareholder derivative litigation filed against the Company in 2005. The derivative settlement is also subject to notice and approval from the United States District Court for the Southern District of New York. In connection with these settlements, the Company agreed to certain corporate governance enhancements which will, among other things, impose additional director independence requirements. As part of the global settlement, the Company will pay approximately $29 million and the Company's insurers and certain individual defendants will pay an aggregate of approximately $11 million.

The Lead Counsel in the In Re R&G Financial Corporation Securities Litigation class action announced on August 29, 2008 that today they submitted to the United States District Court for the Southern District of New York for its approval of an amended plan of allocation for the $51 million settlement of this action (the "Settlement"). The amended plan of allocation now includes specific provisions for R&G's Noncumulative Perpetual Monthly Income Preferred Stock -- Series A, B, C and D (the "Preferred Shares"), which, as publicly-traded securities of R&G during the Class Period, are part of the Class and Settlement in this action.

On October 17, 2007, the PWC defendant’s Motion to Dismiss was denied by the Court. On May 21, 2008, a Stipulation and Agreement of Settlement was struck by the parties and was subsequently approved by a Preliminary Order on May 29, 2008. On October 08, 2008, a Final Judgment was entered byt the Court thereby dismissing the case with prejudice. On January 24, 2011, an Order Approving Distribution Plan was issued by the Court.

COMPANY INFORMATION:

Sector: Financial
Industry: Regional Banks
Headquarters: Puerto Rico

SECURITIES INFORMATION:

Ticker Symbol: RGF
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 05-CV-04186
JUDGE: Hon. John E. Sprizzo
DATE FILED: 04/27/2005
CLASS PERIOD START: 04/21/2003
CLASS PERIOD END: 04/25/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Ademi & O'Reilly, LLP
    3620 East Layton Ave., Ademi & O'Reilly, LLP, WI 53110
    866-264-3995 414-482-8001 · inquiry@ademilaw.com
  2. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  3. Berman DeValerio Pease Tabacco Burt & Pucillo (MA)
    One Liberty Square, Berman DeValerio Pease Tabacco Burt & Pucillo (MA), MA 2109
    617.542.8300 617.230.0903 · info@bermanesq.com
  4. Brian Felgoise
    230 South Broad Street, Suite 404 , Brian Felgoise, PA 19102
    215.735.6810 215/735.5185. ·
  5. Brodsky & Smith, LLC (former Pennysylvania)
    11 Bala Avenue, Suite 39, Brodsky & Smith, LLC (former Pennysylvania), PA 19004
    610.668.7987 610.660.0450 · esmith@Brodsky-Smith.com
  6. Dyer & Shuman, LLP
    801 E. 17th Avenue, Dyer & Shuman, LLP , CO 80218-1417
    303.861.3003 800.711.6483 · info@dyershuman.com
  7. Glancy Binkow & Goldberg LLP (NY)
    1501 Broadway, Suite 1416, Glancy Binkow & Goldberg LLP (NY), NY 10036
    917.510.000 646.366-089 · info@glancylaw.com
  8. Klafter & Olsen LLP (Washington)
    1250 Connecticut Ave., N.W. Suite 200, Klafter & Olsen LLP (Washington), DC 20036
    202.261.3553 202.261.3533 · info@klafterolsen.com
  9. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  10. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (NY)
    200 Broadhollow Road, Suite 406, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (NY), NY 11747
    631-367-7100 631-367-1173 ·
  11. Milberg Weiss Bershad & Schulman LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg Weiss Bershad & Schulman LLP (New York), NY 10119
    212.594.5300 212.868.1229 · info@milbergweiss.com
  12. Murray, Frank & Sailer LLP
    275 Madison Ave 34th Flr, Murray, Frank & Sailer LLP, NY 10016
    212.682.1818 212.682.1892 · email@murrayfrank.com
  13. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  14. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  15. Scott & Scott LLC (Connecticut)
    P.O. Box 192, 108 Norwich Avenue, Scott & Scott LLC (Connecticut), CT 06415
    860.537.5537 860.537.4432 · scottlaw@scott-scott.com
  16. Smith & Smith LLP
    3070 Bristol Pike, Suite 112, Smith & Smith LLP, PA 19020
    215.638.4847 215.638.4867 ·
  17. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
  18. Wechsler Harwood, LLP.
    488 Madison Avenue 8th Floor, Wechsler Harwood, LLP., NY 10022
    212.935.7400 212.753.3630 · info@whesq.com
  19. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
  20. Zwerling Schachter & Zwerling LLP
    845 Third Avenue, Zwerling Schachter & Zwerling LLP, NY 10022
    212-223-3900 212-371-5969 · inquiry@zsz.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 05-CV-04186
JUDGE: Hon. John E. Sprizzo
DATE FILED: 02/27/2007
CLASS PERIOD START: 01/21/2003
CLASS PERIOD END: 02/13/2007
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Barrack, Rodos & Bacine (Main office, Philadelphia)
    Two Commerce Square, 2001 Market Street, Suite 3300 , Barrack, Rodos & Bacine (Main office, Philadelphia), PA 19103
    215.963.0600 215.963.0838 · info@barrack.com
  2. Bernstein Litowitz Berger & Grossmann LLP (Former New York)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (Former New York), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
No Document Title Filing Date
No Document Title Filing Date