Several class actions have been filed against financial services organization American Business Financial Services, Inc. (Nasdaq: ABFI) and certain of its officers and directors by stockholders who purchased the company's common stock between January 27, 2000, and June 25, 2003. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

The action alleges that during the applicable period, the defendants failed to disclose and indicate (1) that ABFI used a deception to take homes from delinquent borrowers in order keep its delinquency rate low; (2) that the deception allowed the company to skip the normal foreclosure process more frequently; (3) that the deception helped the it to reduce its delinquency rate in its $3.6 billion loan portfolio; (4) as result of reducing its delinquency rate in its $3.6 billion loan portfolio, ABFI was able to securitize more loans; and (5) were thus able to collect interest income from its securitized loans and inflate its financial results.

On June 13, 2003, ABFI disclosed that it had received a civil subpoena from the U.S. Department of Justice requesting that it provide documents relating to mortgage loan transactions and securitization agreements. On news of this, ABFI shares fell 20% to close at $8.27 per share. On June 26, 2003, the company disclosed that it anticipated incurring a loss for the quarter and year ended June 30, 2003, due to its inability to complete its quarterly securitization of loans. On this news, shares of ABFI fell 12% to close at $7.40 per share.

If you purchased the securities issued by American Business Financial Services, Inc., you may request appointment by the court as a lead plaintiff if you do so by March 23, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.