Stull, Stull & Brody Files Class Action Suit Against Pacific Capital Bancorp

• Press Release
• Source: Stull, Stull & Brody
• On 6:15 pm EDT, Tuesday October 13, 2009

NEW YORK--(BUSINESS WIRE)--Stull, Stull & Brody today announced that a class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of purchasers of the common stock of Pacific Capital Bancorp (“Pacific Capital” or the “Company”) (Nasdaq: PCBC - News) between April 30, 2009 and July 30, 2009, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).

Related Quotes

Symbol	Price	Change
PCBC	1.07	-0.04

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If you wish to serve as a lead plaintiff you must move the Court by no later than sixty days from September 8, 2009. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel Jason D’Agnenica at Stull, Stull & Brody at (800) 337-4983 or (212) 687-7230, or via e-mail to pcbc@ssbny.com. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint alleges that Pacific Capital and certain of its senior executive officers issued materially false and misleading statements and/or concealed material information relating to the Company’s reserves for losses on its loan portfolio in violation of Exchange Act sections 10(b) and 20(a). The complaint also alleges that a stock analyst covering Pacific Capital issued a “buy” rating on the Company’s common stock despite knowingly or recklessly failing to conduct a standard analysis of Pacific Capital’s banking operations that would have revealed that it was not appropriate to issue a “buy” rating.

As alleged in the complaint, purchasers of Pacific Capital common stock during the Class Period were misled to believe that the Company was maintaining a strong allowance for loan losses which would enable it to absorb losses in its portfolio. As alleged in the complaint, defendants’ misstatements and omissions relating to Pacific Capital’s loan loss provision caused the Company’s common stock to trade at artificially inflated levels between April 30, 2009, when the Company reported that it maintained its loan loss provision at a very high level, through July 30, 2009, when the Company admitted that it had not adequately reserved for loan losses, had not applied a conservative reserve methodology, and needed to record an additional loan loss provision of $117 million. The “buy” rating issued by the analyst defendant on the Company’s common stock also contributed, as alleged, at certain times during the Class Period to the artificial inflation in the price of Pacific Capital stock.

The complaint alleges that investors who purchased the Company’s common stock at artificially inflated prices during the Class Period suffered damages when the truth about the Company’s financial condition was revealed to the market at certain times during the Class Period and the price of the Company’s common stock declined. According to the complaint, as the truth about the Company’s financial condition became known to the market, the price of the Company’s common stock declined from a closing price of $6.94 per share on April 30, 2009, to a closing price of $2.12 per share on July 31, 2009.

Stull, Stull & Brody has been retained by a purchaser of Pacific Capital common stock seeking to recover damages on his own behalf and on behalf of a class of purchasers of Pacific Capital common stock. Stull, Stull & Brody has litigated many class actions for violations of securities laws on behalf of defrauded investors over the past 40 years and has obtained court approval of substantial settlements on numerous occasions. Stull, Stull & Brody has offices in New York and Los Angeles. The Stull, Stull & Brody website (www.ssbny.com) has more information about the firm.

Stull, Stull & Brody
Jason D’Agnenica, 800-337-4983 or 212-687-7230
pcbc@ssbny.com