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Case ID: 5105 | Stocks | 07/21/2008
According to a law firm press release, a class action was filed on May 16, 2008 by an institutional investor on behalf of purchasers of Downey Financial Corp. common stock during the period between October 16, 2006 and March 14, 2008.
The complaint charges Downey and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Downey is a savings and loan holding company. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. As a result of defendants’ false statements, Downey’s stock traded at artificially inflated prices during the Class Period, reaching a high of $74.85 per share in June 2007. On October 10, 2007, Downey announced that it expected to incur an operating loss for the 2007 third quarter due to the continued weakening in the housing market. Then, before the market opened on March 17, 2008, Downey released its monthly selected financial results for the 13 months ended February 29, 2008, which showed a significant increase in non-performing assets to almost 11% of total assets, up from 1.2% in May 2007. Downey had to restructure debt for many borrowers to avoid having their loans fail. On this news, Downey’s stock dropped to close at $18.82 per share on March 17, 2008, a decline from $19.14 per share on March 14, 2008, and a decline of 68% from $59 per share on October 9, 2007. According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) defendants’ portfolio of Option ARMs contained millions of dollars worth of impaired and risky securities, many of which were backed by subprime mortgage loans; (b) prior to the Class Period, Downey had seen Countrywide’s growth and had started to get more aggressive in acquiring loans from brokers such that the loans were extremely risky; (c) defendants failed to properly account for highly leveraged loans such as mortgage securities; (d) Downey had very little real underwriting, which led to large numbers of bad loans that would cause huge numbers of defaults; and (e) Downey had not adequately reserved for Option ARM loans, the terms of which provided that during the initial term of the loan borrowers could pay only as much as they desired with any underpayment being added to the loan balance.
At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action lawsuit has been filed in U.S. District Court for the Northern District of California against Infineon Technologies, AG. The case involves violations of federal securities law. No additional information about the substance of the allegations is available at this time. Classactionamerica.com will monitor this case and provide additional details as soon as they become available. A class action has been filed against non-invasive surgical treatments provider HealthTronics Surgical Services, Inc. (Nasdaq: HTRN) and certain of its officers and directors by stockholders who purchased the company's common stock between January 4, 2000, and July 25, 2003. A class action has been filed against ConAgra Foods, Inc. (NYSE:CAG), certain of its officers and directors by stockholders who purchased the company's common stock between September 18, 2003 and June 07, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. NEW ORLEANS, LA--(MARKET WIRE)--Feb 22, 2006 -- Kahn Gauthier Swick, LLC ("KGS") announces that a securities class action lawsuit has been commenced in the U.S. District Court for the Central District of California, on behalf of shareholders who purchased, exchanged or otherwise acquired the common stock of The Cooper Companies, Inc. (NYSE:COO - News) between July 29, 2004 and November 21, 2005. No class has yet been certified in this action. A class action lawsuit has been filed against Prestige Brand Holdings, Inc. (PBH), certain of its officers and directors by stockholders who purchased the company's common stock between February 09, 2005 and July 28, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. On July 23, 2003, the court granted final approval to the parties' $2 million settlement of several class actions filed against financial services company Towne Services, Inc. (formerly Nasdaq: TWNE) and certain of its officers and directors by stockholders who purchased the company's common stock between June 23 and October 13, 1999. To recover under the settlement, a completed proof of claim postmarked no later than September 15, 2003, must be mailed to the claims administrator. |
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