Sterling Financial Corporation (Sterling" or the Company) is a bank holding company with branches in the western United States.

According to a press release dated May 25, 2007, the Complaint charges that certain present and former officers, employees, and directors of Sterling's wholly owned subsidiaries Equipment Finance LLC ("EFI") and Bank of Lancaster County, N.A. violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by engaging in a scheme to defraud the investing public and to artificially inflate the stock price of Sterling.

The Complaint alleges that certain officers and employees of EFI engaged in a sophisticated loan scheme to cause Sterling to issue materially false and misleading financial information to the investing public in order to artificially inflate Sterling's stock price in violation of federal securities laws.

The Complaint asserts that on April 30, 2007 Sterling announced that it expected to restate its previously issued financial statements for FY 2004 through and including FY 2006 in connection with certain accounting irregularities at EFI. The Company announced that EFI's CEO and President had voluntarily relinquished his positions. This adverse announcement caused to Company's stock to fall nearly 19%.

After market-close on May 24, 2007, Sterling announced preliminary results from its ongoing investigation. According to the Complaint, the investigation revealed evidence of a sophisticated loan scheme, orchestrated deliberately by certain EFI officers and employees over an extended period of time to conceal credit delinquencies, falsify financing contracts and related documents, and subvert established internal controls established by Sterling. As a result, the Company announced it terminated 5 employees at EFI and expected to take a cumulative after-tax charge of $145 million to $160 million to the Company's FY 2006 results. Further announcements on May 24, 2007 revealed the Company was halting its dividend. This announcement caused the Company's stock to fall nearly 40% on May 25, 2007.

On November 8, 2007, several actions pending in the U.S. District Court for the Southern District of New York were transferred to the Eastern District of Pennsylvania, joining several actions pending in that court.

On December 21, 2007, Judge Lawrence F. Stengel signed the Order consolidating all related action under lead case, 07-CV-2171. The New Mexico Funds were appointed lead Plaintiff and Cauley Bowman Carney & Williams, PLLC was approved as lead Counsel. On February 29, 2008, the lead Plaintiffs filed a Consolidated Amended Complaint. The Defendants responded with a motion to dismiss on April 21, 2007, but withdrew their motion on February 6, 2009, due to the proposed settlement. On March 2, 2009, the Plaintiffs filed a motion for settlement. The proposed settlement was in the amount of $10,250,000 in cash. On March 9, 2009, the settlement was preliminarily approved. The settlement was finally approved on April 5, 2009. On September 11, 2009, the Plaintiffs’ motion for an award of attorneys’ fees was granted in part and denied in part.