CFHI Coast Finl Hldgs (MM)

The law firm of Spector, Roseman & Kodroff, P.C. announces that a securities class action lawsuit was commenced in the United States District Court for the Middle District of Florida, on behalf of purchasers of the publicly traded securities of Coast Financial Holdings, Inc. ("Coast Financial" or the "Company") (NASDAQ:CFHI) between October 28, 2005 through January 19, 2007, inclusive (the "Class Period"). The Complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements contained in press releases and filings with the Securities and Exchange Commission during the Class Period. Specifically, according to the complaint in order to take advantage of the housing boom and in particular the fast-growing real estate market in Southwest Florida, Coast Financial partnered with Construction Compliance Inc. ("CCI") to lend money to borrowers who would use the money to construct homes in that area. The plan was simple: borrowers would put little money down and take out construction loans in their name that CCI would then use to construct the properties. CCI would then use the credit line to construct the properties and pay the interest on the loans. Once the construction was completed, borrowers would then sell the property or "flip" it for a quick profit. The Complaint alleges that, unbeknownst to shareholders, by the start of the Class Period, Coast Financial had materially increased its exposure to CCI and its investors and had extended tens of millions of dollars of credit for the construction of homes in Florida. Given the then-deteriorating condition of the Florida real estate market, the Company should have increased its loan loss reserves for this segment of the business but did not. The Complaint alleges that, throughout the Class Period, defendants never disclosed all material facts about its relationship with CCI, the status of CCI's construction projects or the Company's increasing exposure to CCI. Furthermore, the Company should have fully disclosed the true risks associated with this line of business - there were little, if any, controls placed on the CCI and its ability to withdraw money from Coast Financial. Ultimately, CCI withdrew tens of millions of dollars and never completed construction on many homes. If you purchased Coast Financial securities during the Class Period, you may, no later than May 21, 2007, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the �largest financial interest� in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the �largest financial interest,� and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Coast Financial securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time. If you wish to join this action, please visit http://www.srk-law.com/dbjoinaclassaction.asp. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via e-mail at classaction@srk-law.com. For more detailed information about the firm please visit its website at http://www.srk-law.com. Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm�s reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered through judgments and settlements on behalf of thousands of defrauded shareholders and companies.