Milberg Weiss Announces the Filing of a Class Action Suit against R&G Financial Corp. and Certain of Its Officers and Directors on Behalf of Investors

Business Wire, May 6, 2005

NEW YORK -- The law firm of Milberg Weiss Bershad & Schulman LLP announces that it has filed a class action lawsuit on behalf of purchasers of the securities of R&G Financial Corporation ("R&G" or the "Company") (NYSE: RGF) between April 21, 2003 and April 25, 2005 inclusive, (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at www.milbergweiss.com

The action is pending in the United States District Court for the District of Puerto Rico against defendants R&G Financial Corp., Victor J. Galan, Joseph R. Sandoval And Ramon Prats.

The Complaint alleges that Defendants issued, or caused to be issued, false and misleading statements during the Class Period to artificially inflate the value of R&G stock. More specifically, the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that R&G's earnings quality had been significantly weakened by the Company's use of more aggressive assumptions to generate gain on sale income, as well as to the value it retained in its interest only ("IO") residuals in securitization transactions; (2) that R&G's methodology used to calculate the fair value of its IO residual interests retained in securitization transactions was incorrect and caused the Company to overstate its financial results by at least $50 million; (3) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On April 25, 2005, after the market had closed, R&G Financial announced that it would restate its financial results for fiscal years 2003 and 2004. Shares of R&G Financial fell $8.14 per share, or 35.12 percent, on April 26, 2005, to close at $15.04. A few hours after trading had concluded for the day, R&G issued a press release announcing that it was the subject of an informal SEC investigation related to it restatement announcement.

If you bought the securities of R&G between April 21, 2003 and April 25, 2005 and sustained damages, you may, no later than June 20, 2005, request that the Court appoint you as lead plaintiff. 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 the class member's claim is typical of the claims of other class members, and that the class member 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, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice, to serve as your counsel in this action.

Milberg Weiss Bershad & Schulman LLP (www.milbergweiss.com) has over 100 lawyers in offices in New York City, Boca Raton, Los Angeles, Delaware, Seattle and Washington, D.C. and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others for nearly 40 years. Please contact the Milberg Weiss website for more information about the firm and its history. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:

Steven G. Schulman
One Pennsylvania Plaza, 49th fl.
New York, NY, 10119-0165
Phone number: (800) 320-5081
Email: sfeerick@milbergweiss.com

Or

Maya Saxena
Joseph E. White III
Ariel Acevedo
5200 Town Center Circle, Suite 600
Boca Raton, FL 33486
Phone number: (561) 361-5000
Email: msaxena@milbergweiss.com
       jwhite@milbergweiss.com
       aacevedo@milbergweiss.com
Website: http://www.milbergweiss.com