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Case ID: 5135 | Stocks | 07/24/2008
Accoridng to a law firm press release, an institutional investor filed suit against the company and certain officers and directors with violations of the Securities Exchange Act of 1934. CompuCredit provides credit and related financial services and products to underserved and un-banked consumers.
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, CompuCredit stock traded at artificially inflated prices during the Class Period, reaching its Class Period high of $40.61 per share in December 2006. Then, on June 10, 2008, The Wall Street Journal reported that federal regulators were expected to seek more than $100 million in fines and restitution against CompuCredit related to deceptive credit-card marketing tactics and abusive debt-collection practices. On this news, CompuCredit's stock dropped $2.49 per share to close at $6.30 per share on June 10, 2008, a one-day decline of 28% on extremely high volume. 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) the Company's assets contained millions of dollars worth of impaired and risky securities, many of which were backed by loans to subprime borrowers; (b) the Company was not adequately accounting for its provision for loan losses in violation of Generally Accepted Accounting Principles, causing its financial results to be materially misstated; (c) the Company's improper marketing and collection practices would lead to large fines and would harm the Company's future results; (d) the company had far greater exposure to anticipated losses and defaults related to its subprime customers than it had previously disclosed; (e) given the deterioration in the market for asset-backed securities related to subprime consumers, the Company would be forced to reduce its lending operations due to liquidity concerns as it relied upon the sale of its asset-backed securities to fund its ongoing operations; and (f) given the increased volatility in the subprime market and increased level of delinquencies and defaults that CompuCredit was experiencing, the Company had no reasonable basis to make projections about its financial results.
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 Several class actions have been filed against global medical products and services company Baxter International, Inc., (NYSE:BAX) and certain of its officers and directors by stockholders who purchased the company's common stock between April 19, 2001, and July 21, 2004. Also included, are all those who acquired Baxter's shares through its acquisitions of Autros, Fusion Medical, ESI Lederle, Acambis, Alpha-1, Cook Pharmaceutical, and Icodextrin, and present and former employees who purchased stock through Baxter's Retirement Savings Plans. The actions claim 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.
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. According to the press release, the complaint charges that the defendant Corporation and certain of its officers violated Sections 10(b) and 20(a) of the Exchange Act by issuing materially inaccurate financial statements to the investing public. A class action has been filed against Guidant Corporation (GDT), certain of its officers and directors by stockholders who purchased the company's common stock between December 15, 2004 and November 3, 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. Kahn Gauthier Swick, LLC ("KGS") announces that it has filed a class action lawsuit in the United States District Court for the Central District of California, Western Division on behalf of shareholders who purchased, exchanged or otherwise acquired the common stock and other securities of Broadcom Corporation ("Broadcom'' or the "Company'') (Nasdaq: BRCM -News) between July 21, 2005 and July 13, 2006.
Broadcom and certain of its offices and directors are charged with issuing a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. On July 14, 2006, Broadcom announced that it would record more than $750 million in added expenses and restate its past earnings related to the illegal backdating of stock options. Prior to any news of options backdating reaching in the market, shares of Broadcom traded at slightly above $40.00 per share and, thereafter, shares traded down to approximately $27.50 per share - - a rapid decline of over 31%.
Options pricing backdating occurs when options grants to senior officers or directors of public companies are made at prices lower than the trading price of the stock on the date such options are granted. The undisclosed backdating of options violates generally accepted accounting principles.
If you wish to serve as lead plaintiff, you must move the Court no later October 12, 2006. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you would like to discuss your legal rights, you may e-mail or call KGS, without obligation or cost to you, or you may submit your information on this webpage to be reviewed by a lawyer. You may contact Managing Partner Lewis Kahn of KGS direct, toll free 1-866-467-1400, ext., 100, or 504-648-1850, or by email at lewis.kahn@kglg.com. According to a press release dated September 18, 2008, a class action lawsuit against Lord, Abbett & Co. LLC and Lord Abbett Distributor LLC ("Lord Abbett") on behalf of investors who received class A shares of certain multi-class Lord Abbett stock mutual funds after investing less than $50,000, and thus paid a sales charge of 5.75%. The complaint alleges Lord Abbett violated Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. Sec. 78j(b), and Rule 10b-5, 17 C.F.R. Sec. 240.10b-5.
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