Lerach Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit Against Accredited Home Lenders Holding Co.
Lerach Coughlin Stoia Geller Rudman & Robbins LLP (“Lerach Coughlin”) (http://www.lerachlaw.com/cases/accreditedhome/) has announced that a class action has been commenced in the United States District Court for the Southern District of California on behalf of purchasers of Accredited Home Lenders Holding Co. (“Accredited”) (NASDAQ:LEND) common stock during the period between November 1, 2005 and March 12, 2007 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffs’ counsel, William Lerach or Darren Robbins of Lerach Coughlin at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/accreditedhome/. 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.
The complaint charges Accredited and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Accredited operates as a mortgage banking company in the United States and Canada.
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, Accredited stock traded at artificially inflated prices during the Class Period, reaching a high of $58.45 per share on May 11, 2006.
On February 14, 2007, the Company issued a press release announcing disappointing profitability. Then, on March 12, 2007, after the market closed, the Company issued a press release announcing that the Company was exploring various strategic options. The Company reported that it had paid approximately $190 million in margin calls on its facilities since January 1, 2007. In addition, Accredited was seeking waivers and extensions of waivers of certain financial and operating covenants under its warehouse and repurchase facilities. On March 13, 2007, Accredited’s stock collapsed $7.43 per share to close at $3.97 per share, a one-day decline of 65% on volume of 41.9 million shares, 20 times the average three-month 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 lacked requisite internal controls, and, as a result, the Company’s projections and reported results issued during the Class Period were based upon defective assumptions and/or manipulated facts; (b) the Company’s financial statements were materially misstated due to its failure to properly account for its allowance for loan repurchase losses; (c) given the deterioration and the increased volatility in the sub-prime market, the Company would be forced to tighten its underwriting guidelines which would have a direct material negative impact on its loan productions going forward; and (d) given the increased volatility in the sub-prime market, the Company had no reasonable basis to make projections about its 2007 results. As a result, the Company’s projections issued during the Class Period about its 2007 results were at a minimum reckless. As a result of defendants’ false statements, Accredited’s stock price traded at inflated levels during the Class Period. However, after the above revelations seeped into the market, the Company’s shares were hammered by massive sales, sending them down more than 65% from their Class Period high.
Plaintiffs seek to recover damages on behalf of all purchasers of Accredited common stock during the Class Period (the “Class”). The plaintiffs are represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
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