Investor Alert: KGS Announces That ACA Capital Holdings, Inc. Investors May Now

UNLESS A CLASS IS CERTIFIED, YOU ARE NOT PERSONALLY REPRESENTEDBY COUNSEL UNLESS YOU RETAIN AN ATTORNEY.

If you purchased shares of ACA Capital in connection withthe IPO or if you purchased shares thereafter in the openmarket, you are urged to contact Lewis Kahn, Managing Partner,KGS, toll free 1-866-467-1400, ext. 100, via cell phoneat 504-301-7900, or by email at to learn about your legal rights and how this action maybenefit you. For further information on KGS, please visit.

ACA Capital and certain of its officers and directors --collectively, ``defendants'' -- are charged with including,or allowing the inclusion of, materially false and misleadingstatements in the Registration Statement and Prospectusissued in connection with the IPO, in violation of the SecuritiesAct of 1933.

If you wish to serve as lead plaintiff in this class actionlawsuit, you must move the Court 59 days from today. Anymember of the purported class may move the Court to serveas lead plaintiff through counsel of their choice, pursuantto the Private Securities Litigation Reform Act (``PSLRA''),or may choose to do nothing and remain an absent class member.If you would like to discuss your legal rights, you maye-mail or call KGS Managing Partner Lewis Kahn, withoutobligation or cost to you, toll free 1-866-467-1400, ext.100, via cell phone 504-301-7900, or by email at lewis.kahn@kgscounsel.com.To learn more about KGS, you may visit .KGS focuses its practice on securities class action litigation,and has been appointed lead counsel in numerous federalsecurities class actions.

SPECIAL NOTICE: Courts will generally appoint only one lawfirm to prosecute a securities class action on behalf ofthe shareholders based upon the amount of losses its ``leadplaintiffs'' have suffered. Accordingly, while KGS urgesyou to sign up with the firm, KGS also encourages you tocarefully evaluate any other firm you may consider to representyour interests in the ACA Capital class action, includingthe law firm that filed the first lawsuit against ACA today,should you be considering another firm. Critical componentsof a law firm's ability to successfully prosecute this actionand obtain a strong recovery for you include the resourcesit will dedicate to prosecution of the case, including thenumber of lawyers the firm has available for the ACA Capitalaction in particular, AND especially the quality of thefirm's work. Interested shareholders are encouraged to callfor consultation and to request more information about KGS.