EDMONTON, July 4, 2013 /PRNewswire/ - The Cash Store Financial Services Inc. ("Cash Store Financial" or the "Company") (TSX:CSF; NYSE:CSFS) today announced that a proposed class action proceeding for violation of U.S. federal securities laws has been commenced in the United States District Court of the Southern District of New York against the Company and certain of its present and former officers. The claim is substantially similar to the recently announced proposed class action proceedings in Alberta and Ontario and the previously disclosed complaint filed by Globis Capital Partners L.P.
The proposed U.S. class action concerns alleged misrepresentations made in the Company's quarterly and annual financial statements between November 24, 2010 and May 13, 2013. In particular, the U.S. complaint alleges that Cash Store Financial overvalued the consumer loan portfolio acquired from third party lenders, overstated its net income, understated losses on its internal consumer loan portfolio, and understated its liabilities associated with the settlement of the British Columbia class action.
The Company will defend itself vigorously against what it believes are unfounded allegations.
About Cash Store FinancialCash Store Financial is the only lender and broker of short‐term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX:CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE:CSFS). Cash Store Financial operates 513 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 27 branches in the United Kingdom. Cash Store Financial and Instaloans primarily act as lenders and brokers to facilitate short-term advances and provide other financial services to income-earning consumers who may not be able to obtain them from traditional banks. Cash Store Financial also provides a private-label debit card (the "Freedom" card) and a prepaid credit card (the "Freedom MasterCard") as well as other financial services, including bank accounts.