Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit Against Federal Home Loan Mortgage Company
Posted on November 21, 2007 at 15:26 PM EST
Coughlin Stoia Geller Rudman & Robbins LLP (“Coughlin Stoia”) (http://www.csgrr.com/cases/freddie/) today announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Federal Home Loan Mortgage Corporation (“Freddie Mac”) (NYSE:FRE) common stock during the period between August 1, 2006 and November 19, 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 plaintiff’s counsel, Darren Robbins of Coughlin Stoia at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. 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.csgrr.com/cases/freddie/. 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 Freddie Mac and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Freddie Mac is a shareholder-owned company established by Congress in 1970 to support homeownership and rental housing.
The complaint alleges that during the Class Period, defendants made false and misleading statements concerning Freddie Mac’s business, its risk management and the procedures it put in place to protect the Company from problems in the mortgage industry. In fact, during the Class Period, Freddie Mac was not adequately implementing risk control measures. Moreover, the Company’s procedures for appraisals led to many inflated appraisals, increasing the risk of defaults. Ultimately, the Company reported billions of dollars in losses, has been mentioned in investigations by the New York Attorney General and announced it must raise new capital to meet regulatory requirements. On this news, Freddie Mac stock fell over $10 per share to close at $26.74 on November 20, 2007.
According to the complaint, during the Class Period, defendants concealed the following information, which caused their statements to be materially false and misleading: (a) defendants were not implementing sufficient risk management controls to protect the Company from acquiring billions of dollars worth of mortgages with poor underwriting standards, causing the Company to have an untenable amount of risky loans; (b) defendants were not implementing controls to ensure that appraisals were done appropriately and to prevent collusion between lenders and appraisers, increasing the risk of defaults; (c) the Company was not adequately reserving for uncollectible loans, causing its financial results to be misleading; and (d) the Company had billions of dollars of bad loans which it would eventually have to write off, causing losses and capital deficiencies.
Plaintiff seeks to recover damages on behalf of all purchasers of Freddie Mac common stock during the Class Period (the “Class”). The plaintiff is represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston and Philadelphia, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Coughlin Stoia lawyers have been responsible for more than $45 billion in aggregate recoveries. The Coughlin Stoia Web site (http://www.csgrr.com) has more information about the firm.
Darren Robbins, 800-449-4900 or 619-231-1058
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Press Release Service provided by PRConnect.
Stock quotes supplied by Telekurs USA
Postage Rates Bots go here