A class action lawsuit has been filed on behalf of those who purchased or otherwise acquired the securities of Providian Financial Corporation (NYSE:PVN) between June 6, 2001 and October 11, 2001, inclusive (the "Class Period").
The complaint charges that defendants Providian, David Alvarez, James Rowe and Shailesh J. Mehta violated federal securities laws by, among other things, misrepresenting that Providian would continue to sustain revenue and EPS growth, and that the Company would post another quarter of sequential EPS growth, despite having knowledge that the Company's financial condition was actually eroding. During this same time, company insiders sold nearly $22 million worth of their own Providian shares at prices artificially inflated by these misrepresentations. On October 11, 2001, Providian revealed that, contrary to defendants' prior positive statements, it would post no EPS growth and that its EPS would in fact be only a small fraction of what defendants had led the market to believe. This stunning disclosure shocked the market, causing Providian stock to plummet to less than $13 per share before closing at $13.45 on October 12, 2001, a decline of over 75% from its Class Period high of $59.95. Shareholders who purchased Providian stock during the Class Period actually did so at artificially inflated prices and suffered damages when the truth was revealed.
Plaintiff seeks to recover damages on behalf of all those who purchased Providian common stock during the Class Period, excluding defendants and their affiliates.

Update

On February 15, 2002, the Court appointed the Retirement System of Alabama as lead plaintiff, and appointed the law firm of Chitwood & Harley as lead counsel and the law firm of Gold Bennett Cera & Sidener LLP as liaison counsel for the class. On April 16, 2002, plaintiffs filed their consolidated class action complaint on behalf of shareholders who purchased Providian stock during the period June 6, 2001 through October 18, 2001, inclusive. On June 21, 2002, defendants moved to dismiss plaintiffs' Consolidated Class Action Complaint. On December 4, 2002, the Court denied defendants' motion. Defendants filed their answer to plaintiffs' consolidated class action complaint on January 17, 2003. Exchange of initial disclosures and discovery began on February 28, 2003. On January 15, 2004, the court certified the class. Trial has been set to begin on June 7, 2004.