Plaintiffs v Sterling Financial Corporation (NASDAQ: STSA)

The lawsuit, filed by HBSS and Pennsylvania-based Brodsky and Smith, LLC, notes that Sterling's stock price has imploded as the result of ill-advised commercial real estate, construction and land loans, improper accounting and inadequate capitalization, and that Sterling and other defendants failed to properly manage pension funds by maintaining a large investment in Company Stock long after the stock became an imprudent investment - a violation of the federal Employment Retirement Income Security Act (ERISA), the complaint states.

Attorneys representing Oregon plaintiff Corey Deter estimate over 2,500 employees in Washington, Oregon, Idaho, Montana and California are affected by the actions listed in the complaint.

The suit also charges that the Sterling plan heavily invested in Sterling stock despite a clear decline in performance. As of Dec. 31, 2007, the plan held approximately $16 million in Sterling common stock. A year later, Dec. 31, 2008, the plan held approximately $13 million in Sterling common stock, representing in excess of 20 percent of the assets of the pension plan.

In the wake of its diving stock performance, Sterling failed to adequately and timely record losses for its impaired loans and secure assets to safeguard against its defaulting credit portfolio. As a result, Sterling stock traded at artificially inflated prices during the class period, reaching a high of $14.72 per share on Oct. 1, 2008, the lawsuit states. As of last Friday, the beleaguered stock closed at 70 cents per share.

Sterling Bank is one of the largest commercial banks headquartered in Washington. It is one of the largest regional community banks in the U.S. that offers mortgage lending, construction financing and investment products to individuals, small business and commercial organizations and corporations. Golf Savings Bank, a branch of Sterling, focuses on the sale of single-family residential mortgage loans.

For more information contact Nick Styant-Browne at 1-206-268-9373 or STSA@hbsslaw.com.