According to a press release dated on August 24, 2010, in particular, unknown to investors during the Class Period, CVB suffered from a host of undisclosed adverse factors that negatively impacted its business and which would lead the Company to report declining financial results. In particular, at all times during the Class Period: (1) it was not true that the Company's purported success was the result of its integration of acquisitions or defendants' competent management when, in fact, defendants had propped up the Company's results by manipulating CVB's accounting for costs and expenses by failing to properly account for impaired loans;(2) defendants had materially overstated the Company's profitability by engaging in possible accounting violations related to the manner in which defendants accounted for troubled loans -- which violations would ultimately become the subject of an SEC investigation; (3) it was also not true that CVB contained adequate systems of internal operational or financial controls, such that CVB's reported financial statements were true, accurate or reliable; (4) as a result of the foregoing, it also was not true that the Company's financial statements and reports were prepared in accordance with Generally Accepted Accounting Principles ("GAAP") and Securities and Exchange Commission ("SEC") rules; and, (5) as a result of the adverse conditions which defendants failed to disclose, defendants lacked any reasonable basis to claim that CVB was operating according to plan, or that CVB could achieve guidance sponsored and/or endorsed by defendants.
It was only on August 9, 2010, however, when defendants filed with the SEC the Company's 2Q:10 Form 10-Q for the quarter ended June 30, 2010, that investors learned the truth about the Company. Defendants revealed that the Company was the subject of an investigation by the SEC into possible accounting violations related to the manner in which defendants accounted for troubled loans. This belated disclosure had an immediate adverse impact on the price of Company shares, which fell 22% on unusually heavy volume to close at $8.00 per share the day following the news.
On January 21, 2011, the court ordered Case No. 10-CV-06815 closed and it was consolidated with Case No. 10-CV-06256 for all purposes and for trial. On the same day, lead plaintiff and lead counsel were appointed.
On March 7, 2011, a Consolidated Class Action Complaint was filed with the Court by the lead plaintiff against the defendants.
On January 12, 2012, the defendants’ motion to dismiss was granted by the Court concurrently allowing Plaintiffs to file an amended complaint within forty-five (45) days of the date of the order.
On February 27, 2012, Plaintiffs filed the First Amended Consolidated Class Action Complaint with the Court. Defendants filed a Motion to Dismiss on March 26, 2012. On August 21, 2012, the Court issued an Order granting the defendants' motion. Plaintiffs were given leave to file an amended complaint within 30 days. On September 20, 2012, the Plaintiffs filed their second amended complaint.
On May 9, 2013, the Court issued an Order granting the Defendants' motion to dismiss. Plaintiffs were given leave to file an amended complaint. The plaintiffs decided not to file an amended complaint. Thus the Court entered Judgment dismissing this case on September 27, 2013. This Decision was appealed to the Ninth Circuit on October 24.
On February 1, 2016, the Ninth Circuit issued an Opinion affirming in part, reversing in part, and remanding for further proceedings.
The parties filed a Stipulation of Settlement on November 4, 2016. The Settlement was preliminarily approved on December 5, 2016.