NovaStar Hit With Securities Suits

At least four separate securities lawsuits have been filed against subprime residential mortgage lender NovaStar Financial Inc., Kansas City, Mo., in the U.S. District Court for the Western District of Missouri.The actions, filed on behalf of shareholders, charge that head officers and directors artificially inflated the market price of securities throughout the class period, between Oct. 29, 2003, and April 8, 2004. The stock hit a high of $67 per share during that period. The complaint alleges that NovaStar overstated the number of its branches in existence and conducted business in states (such as Nevada) where it didn't have a license. NovaStar has retained the services of Orrick, Herrington & Sutcliffe LLP to defend the company against the suits, which were filed following adverse reaction to recent articles on NovaStar's stock in the news media, the company said.