Orrstown Financial Services, Inc.
Class Period: Mar 24, 2010 to Oct 27, 2011
Lead Plaintiff Deadline: Jul 24, 2012 + Deadline passed
Summary of Case:
A securities class action has been filed against Orrstown Financial Services, Inc. ("Orrstown" or the "Company") on behalf of: (1) all persons and/or entities who purchased Orrstown common stock in connection with, or traceable to, Orrstown's February 23, 2010 Registration Statement and March 24, 2010 Prospectus Supplement (collectively, the "Offering Documents"); and (2) all persons or entities who purchased Orrstown common stock on the open market between March 24, 2010 and October 27, 2011, inclusive. ). This case has been filed in the USDC - (courtUSDC - Pennsylvania (Middle) .
The complaint alleges that the Offering Documents for the March 2010 Offering were negligently prepared and failed to disclose material information about Orrstown's loan portfolio, underwriting practices, and internal controls. The complaint further alleges that Orrstown knowingly and/or recklessly continued to make false and misleading statements after the March 2010 Offering concerning the quality of Orrstown's loan portfolio, internal controls and lending practices while simultaneously assuring the investing public about the quality of Orrstown's management, underwriting procedures, and internal controls.
On October 27, 2011, Orrstown announced that the Federal Reserve Bank of Philadelphia, one of Orrstown Bank's (the "Bank") primary regulators, refused to authorize Orrstown's requested declaration of quarterly dividends. The Federal Reserve took this step to prevent the Company from engaging in an unsafe and unsound banking practice which would further deplete the Company's capital base. In addition, the Company reported it had $9.4 million of charge-offs in that quarter alone and that there were "decreases in asset quality ratios, including elevated levels of nonaccrual loans, restructured loans and delinquencies." The October 27, 2011 disclosures, along with those made in July 2011, revealed that the Bank's prior representations were false and misleading as the loan portfolio was severely impaired and its underwriting and management lead loan approval process was inadequate resulting in the outsourcing of its loan review process to an independent party. After these disclosures, the market corrected its valuation of Orrstown such that the stock price plummeted indicating that Defendants' false assurances had caused Orrstown to trade at artificially high prices throughout the Class Period.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.