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Case ID: 5177 | Stocks | 09/22/2008
According to a law firm press release dated September 8, 2008, a class action was filed against certain of Fannie Mae's officers and/or directors with violations of the Securities Exchange Act of 1934. Fannie Mae is a shareholder-owned, government-sponsored enterprise of the United States federal government that is authorized to make loans and loan guarantees. It is the leading market-maker in the U.S. secondary mortgage market, which helps to replenish the supply of money for mortgages and enables money to be available for housing purchases.
The complaint alleges that during the Class Period, defendants made materially false and misleading statements about Fannie Mae's business and prospects and misrepresented the Company's financial statements. These false and misleading statements cause Fannie Mae stock to trade at artificially inflated prices during the Class Period, reaching as high as $40.69 per share. On July 7, 2008, a financial analyst at Lehman Brothers published a report suggesting that Fannie Mae might need to raise as much as $46 billion in capital, causing the Company's stock price to plummet 16% in a single trading day. Following that disclosure, former St. Louis Federal Reserve Board President, William Poole, suggested that Fannie Mae was nearly insolvent and The New York Times disclosed that the federal government was making plans to place the Company into a conservatorship. On July 13, 2008, the Treasury Department announced that it was making a temporary line of credit available to Fannie Mae and would purchase an equity stake if necessary to provide more capital. From July 7 through July 14, 2008, Fannie Mae's stock price declined over 48%. Finally, on Sunday, September 7, 2008, in the biggest government bail out in U.S. history, federal regulators seized control of Fannie Mae. On September 8, 2008, Fannie Mae stock opened at $1.91 per share, down from a close of $7.04 per share on September 5, 2008, a 72% decline. 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 decline in the U.S. housing market rendered Fannie Mae undercapitalized; (b) Fannie Mae's December 2007 capital raise did not meet its capital needs; (c) Fannie Mae's May 2008 capital raise did not meet its capital needs; (d) although Fannie Mae had more capital than its regulator required, it did not have "surplus capital" as defendants claimed; and (e) Fannie Mae's publicly disclosed financial results misrepresented the financial condition of the Company.
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 The parties have reached a tentative $10 million settlement of several class actions filed against network security firm CyberGuard Corporation (Nasdaq: CGFW, formerly AMEX: CFW) and certain of its officers and directors by stockholders who purchased the company's common stock between January 26 and August 21, 1998. The parties have not announced further details of the settlement, including the deadline for filing claims. According to a press release dated April 10, 2008, the complaint charges Inverness Medical and certain of its officers and directors with violations of the Securities Act. Inverness Medical engages in the development, manufacture, and marketing of consumer and professional medical diagnostic products, as well as a range of vitamins and nutritional supplements worldwide.
A class action has been filed against Watson Pharmaceuticals Inc. (NYSE: WPI) and certain of its officers and directors by stockholders who purchased the company's common stock between November 2, 1999, and November 13, 2001. 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. Several class actions have been filed against flash memory manufacturer Lexar Media, Inc. (Nasdaq:LEXR) and certain of its officers and directors by stockholders who purchased the company's common stock between July 17, 2003, and April 16, 2004. 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. Several class actions have been filed against communications and security systems engineering specialists Wireless Facilities, Inc. (Nasdaq:WFII), and certain of its officers and directors by stockholders who purchased the company's common stock between April 26, 2000, and August 4, 2004. 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. According to a law firm press release, a class action complaint was filed against NVIDIA and its to top officers for violations the Securities Exchange Act of 1934. |
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