Cohen, Milstein, Hausfeld & Toll, P.L.L.C. Announces Class Action Lawsuit Against ACA Capital Holdings, Inc.

The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. announced today that it has filed a class action complaint in the United States District Court for the Southern District of New York on behalf of purchasers of ACA Capital Holdings, Inc. common stock (“ACA Capital”) (NYSE:ACA) from November 2, 2006 through November 20, 2007, inclusive (the “Class Period”), including purchasers who purchased shares pursuant and/or traceable to the Company’s initial public offering on or about November 10, 2006.

The complaint charges ACA Capital and Alan S. Roseman, its President and CEO, with violations of the Securities Act of 1933 and Securities Exchange Act of 1934. ACA Capital is a holding company that provides financial guaranty insurance products to participants in the global credit derivative, structured finance capital, and municipal finance capital markets.

On or about November 9, 2006, ACA Capital priced its IPO of 6,875,000 shares of newly issued common stock and 23,541 shares of existing common stock at $13 per share, generating gross proceeds of $89.4 million. The Registration Statement for the IPO described positively ACA Capital’s business and the Company’s collateralized debt obligation (“CDO”) asset management business. The complaint alleges that the Registration Statement for the IPO contained inaccurate statements of material fact because it failed to disclose that the Company’s CDO assets were materially impaired and overvalued. On November 19, 2007, after the market closed, the Company belatedly disclosed the full extent of its collateralized debt impairment, the high likelihood that its credit rating would be cut, and the high likelihood that it would be unable to post collateral on various debt obligations. On November 20, 2007, as a result of this news, the price of the Company’s stock fell to $1.10 per share.

If you purchased ACA Capital shares during the period from November 2, 2006 through November 20, 2007, inclusive, you may, no later than January 22, 2008, move the court to be appointed as Lead Plaintiff. There are certain legal requirements to serve as Lead Plaintiff. Any member of the proposed class may move the court to serve as Lead Plaintiff through counsel of their choice or may choose to remain an absent class member. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as Lead Plaintiff.

Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has significant experience in prosecuting investor class actions and actions involving securities fraud. The firm has offices in Washington, D.C., New York, Philadelphia, Chicago, San Francisco, and London, and is active in major litigation pending in federal and state courts throughout the nation.

The firm's reputation for excellence has repeatedly been recognized by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has taken a lead role in numerous important cases on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total in the billions of dollars.

If you have any questions about this notice or the action, or with regard to your rights, please contact either of the following:

Contacts:

Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
Steven J. Toll, Esq.
888-240-0775
202-408-4600
stoll@cmht.com
or
Lauren DeStefano
888-240-0775
202-408-4600
ldestefano@cmht.com