Tags: NE | TierOne | Lawsuit

Stockholder Sues TierOne for Betrayal After Stock's Price Falls

Friday, 21 May 2010 02:56 PM

TierOne Corp. betrayed stockholders by filing false statements with the Securities and Exchange Commission that artificially inflated its stock price, according to a stockholder lawsuit filed Thursday.

The filing in U.S. District Court in Nebraska on behalf of David Ray accuses the parent of TierOne Bank of filing false or misleading financial statements in 2008 and 2009. The stock price initially rose but later plummeted.

The lawsuit requests class-action status and seeks unspecified monetary compensation.

TierOne spokesman Ed Swotek declined to comment Friday, saying the company hadn't yet seen the lawsuit.

Ray, of Tallahassee, Fla., said in court documents that he bought 4,972 shares of TierOne stock in 2008 and 2009 at prices ranging from $19.40 to 85 cents. He sold 4,772 shares between December and April at prices between 35 cents and 71 cents, he said.

Lincoln-based TierOne will be removed from the Nasdaq stock market next Friday because the banking company has failed to file several overdue financial reports while it tries to satisfy federal regulators.

The banking company has been under strict scrutiny from the federal Office of Thrift Supervision since early 2009, after the bank reported four straight quarters of losses due to non-performing loans.

Earlier this year, TierOne's independent auditor resigned, which makes it difficult for the company to file its overdue financial reports because it needs an auditor to verify the data. TierOne has been searching for a new auditor.

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