Colonial BancGroup, Inc CNB Securities Fraud

February 10 2009 - by Lucy Campbell

Company:	Colonial BancGroup, Inc
Ticker Symbol:	CNB
Class Period:	Dec-2-08 to Jan-27-09
Date Filed:	Feb-9-09
Lead Plaintiff Deadline:	Apr-10-09
Court:	Middle District of Alabama
Allegations:

A class action lawsuit has been filed against Colonial BancGroup, Inc. ("Colonial" or the "Company") (NYSE: CNB) and certain of its officers in the U.S. District Court for the Middle District of Alabama on behalf of all persons or entities who purchased the securities Colonial from December 2, 2008 through January 27, 2009, inclusive (the "Class Period"). As described below, if you purchased Colonial's publicly traded securities during the Class Period, you have 60 days from today to move the Court to be appointed a Lead Plaintiff.

Defendant Colonial is a bank holding company whose primary business is commercial and consumer banking. The Complaint alleges that the Defendants violated the federal securities laws by disseminating materially false and misleading statements contained in a press release and a related filing with the Securities and Exchange Commission concerning the Company's participation in the Troubled Asset Relief Program ("TARP"). Specifically, during the trading day on December 2, 2008, Colonial issued a press release announcing that it had received TARP funding approval for an injection of $550 million. The press release also detailed the purported terms of the TARP funding with the United States Treasury Department including that the government would received preferred stock as well as warrants to purchase Colonial common stock. In response to that announcement Colonial's stock price surged over 50 percent from its $2 per share close on December 1, 2008 to close at $3.08 per share on December 2, 2008.

However, the Defendants did not disclose that Colonial would be required to raise additional outside capital of $300 million before it could receive the $550 million in TARP funding. Defendants belatedly disclosed that material fact after the markets closed on January 27, 2009. In response to that announcement, Colonial's stock price plunged from its close of $1.58 on January 27, 2009 to $0.85 the next trading -- a 46% drop -- on extraordinary volume exceeding 26 million shares.

If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.

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