Atlanta Law Firm Chitwood & Harley Files Class Action Lawsuit Against Capital One Financial Corp

Business Wire, August 6, 2002

Business Editors & Legal Writers

ATLANTA--(BUSINESS WIRE)--Aug. 6, 2002

Notice is hereby given that Chitwood & Harley has filed a class action lawsuit in the United States District Court for the Eastern District of Virginia, on behalf of purchasers of the securities of Capital One Financial Corporation ("Capital One" or the "Company") (NYSE: COF) between January 15, 2002 and July 16, 2002, inclusive (the "Class Period").

The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5, by issuing a series of materially false and misleading statements relating to the nature of Capital One's business operations, which caused Capital One's stock price to become artificially inflated.

During the Class Period, Capital One announced that each quarter resulted in record revenues and earnings and that the Company was well-capitalized and had attained an excellent credit performance. However, the complaint alleges that these reports were materially false and misleading because Capital One omitted that, in breach of regulatory guidelines released on January 31, 2001, it had been under-reserving for subprime loans and was undergoing severe infrastructure inadequacies, with respect to its credit-risk assessment and the Company's information system.

When it was revealed that federal regulators had instructed the Company to increase its loan loss reserves and improve the technology that Capital One uses to provide loans and credit cards to subprime consumers, the price of Capital One common stock plunged, declining 39% from a close of $50.60 per share on July 16, 2002, to close at $30.48 per share on July 17, 2002.

Plaintiffs seek to recover damages on behalf of all those who purchased or otherwise acquired Capital One securities during the Class Period. If you bought or otherwise acquired securities of Capital One between January 15, 2002 and July 16, 2002, you may request that the Court appoint you as lead plaintiff. A lead plaintiff is a person who acts on behalf of other class members in directing the litigation. Any member of the proposed class who wishes to move the Court to serve as lead plaintiff must do so no later than September 17, 2002. In order to serve as lead plaintiff, you must meet certain legal requirements.

Plaintiffs in this case are represented by Chitwood & Harley, an Atlanta law firm that concentrates its practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation. Chitwood & Harley has been appointed lead counsel in major actions throughout the United States in both federal and state courts and has been instrumental in recovering billions of dollars on behalf of its clients.

If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Nikole Davenport at 1-888-873-3999 (toll-free) or by e-mail at nmd@classlaw.com, CHITWOOD & HARLEY, 2900 Promenade II, 1230 Peachtree Street, N.E., Atlanta, Georgia 30309. For more information about Chitwood & Harley, please visit our website at www.classlaw.com.