Doral Financial Corp.

New York, NY: (Apr-30-07) A class action shareholder lawsuit filed against Doral Financial Corp., a Puerto Rican bank, alleged that the company misled investors about the value of some of its investments, leading to considerable losses and punitive damages. The suit claimed that Doral Financial painted an inaccurate picture of its financial health. In April 2005, Doral Financial said it would need to restate five years of financial results because it incorrectly calculated the value of some of its mortgage-backed bonds. Those bonds had floating interest rates, and the bank said it recorded the value of the bonds using the wrong interest-rate guide. In a settlement reached, the bank agreed to pay $129 million to the shareholders in the suit. $34 million of the settlement will be covered by insurers. In order to raise money to pay shareholders, Doral Financial is negotiating with a private equity investor that may take a stake in the company, leading to a significant increase in the bank's outstanding shares. [STREET INSIDER: DORAL SETTLEMENT]