Capstead Mortgage Corporation - Securities Class Action

Company and Case Information

IMPORTANT INFORMATION | INDEX OF FILINGS | SEARCH

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright (c) 2001
Stanford Law School

Capstead Mortgage Corporation Conclusion: According to the Company’s FORM 10-Q For The Quarterly Period Ended September 30, 2003, by order dated March 31, 2003, the court granted the Company and named officers' motions to dismiss and entered an order dismissing the amended complaint and denying the plaintiffs' request to further amend their complaint. In early November 2003, the plaintiff's opportunity to appeal this dismissal to the Fifth Circuit Court of Appeals passed.

As reported by the same SEC filing, during 1998, twenty-four purported class action lawsuits were filed against Capstead and certain of its officers alleging, among other things, that the defendants violated federal securities laws by publicly issuing false and misleading statements and omitting disclosure of material adverse information regarding the Company's business. After these actions were consolidated and the court appointed a lead plaintiff group, an amended complaint was filed in October 2000. The amended complaint claims that as a result of alleged improper actions, the market prices of the Company's equity securities were artificially inflated during the period between April 17, 1997 and June 26, 1998 and seeks monetary damages in an undetermined amount. In February 2001, the Company and named officers responded to this amended complaint with motions to dismiss all allegations against the Company and the named officers.

The original lawsuit commenced alleging defendants with materially inflated the market price of Capstead's stock during the period April 17, 1997 through June 25, 1998. Defendants did so by misrepresenting the strength and diversification of Capstead's portfolio, falsely representing to the market that the Company had positioned itself to generate strong earnings in virtually any interest rate environment. In addition, the complaint charges that defendants issued false financial statements that overstated Capstead's earnings and assets by failing to take necessary write downs to the portfolio. Finally, on June 26, 1998, Capstead could no longer conceal its huge problems. Capstead announced that it would write down the value of its mortgage servicing assets and sell its interest-only securities at an enormous loss, resulting in losses of about $255 million in the second quarter of 1998. These losses were greater than all the net income the Company reported during the entire 14-month class period from April 1997 to June 1998. Upon disclosure of the truth, the price of Capstead's stock fell immediately to as low as $8 11/16, 68 percent lower than the Class Period high of $27 13/16, on huge volume. The complaint charges that, at the same time defendants were artificially inflating the market, insiders exchanged certain Capstead securities for cash, resulting in more than $10.6 million in proceeds to the insiders.

INDUSTRY CLASSIFICATION:
SIC Code: 6798
Sector: Services
Industry: Real Estate Operations

COMPANY/ISSUER NAME:	Capstead Mortgage Corporation
COMPANY/ISSUER TICKER:	CMO
COMPANY WEBSITE:	http://www.capstead.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Netsky, et al. v. Capstead Mortgage Corporation, et al.

COURT: N.D. Texas	DOCKET NUMBER: 98-CV-1716
JUDGE NAME: Hon. JB
DATE FILED: 07/23/1998	SOURCE: Internet
CLASS PERIOD START: 04/17/1997	CLASS PERIOD END: 06/25/1998
TYPE OF COMPLAINT: Unamended/Unconsolidated
PLAINTIFF FIRMS IN THIS OR SIMILAR CASE:
Puls Taylor & Woodson 512 Main Street - 14th Floor, Fort Worthtre, TX, 76102 (voice) 817.338.1717, (fax) , Wechsler Harwood LLP 488 Madison Avenue 8th Floor, New York, NY, 10022 (voice) 212.935.7400, (fax) , info@whhf.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Complaint for Violation of the Securities Exchange Action of 1934
Type: Complaint		Date on the document: 07/23/1998
Docket
Type: Docket		Date on the document: 10/05/1998
Memorandum Opinion And Order
Type: Order		Date on the document: 07/12/2000

REFERENCE COMPLAINT

In Re: Capstead Mortgage Corporation Securities Litigation

COURT: N.D. Texas	DOCKET NUMBER: 98-CV-1716
JUDGE NAME: Hon. Sam A. Lindsay
DATE FILED: 10/20/2000	SOURCE: Business Wires
CLASS PERIOD START: 04/17/1997	CLASS PERIOD END: 06/26/1998
TYPE OF COMPLAINT: Consolidated and/or Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Berger & Montague PC 1622 Locust Street, Philadelphia, PA, 19103 (voice) 800.424.6690, (fax) 215.875.4604, investorprotect@bm.net Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA) 600 West Broadway, 1800 One America Plaza, San Diego, CA, 92101 (voice) 800.449.4900, (fax) , support@milberg.com Spector & Roseman, PC 2000 Market Street, 12th Floor, Philadelphia, PA, 19103 (voice) (215) 864-2400, (fax) , Stanley, Mandel & Iola LLP 3100 Monticello Avenue, Suite 750 , Dallas, TX, 75205 (voice) 214.443.4300, (fax) , _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 4

DOCUMENTS FOR THE REFERENCE COMPLAINT
Memorandum Opinion And Order
Type: Order		Date on the document: 03/31/2003
Judgment
Type: Other		Date on the document: 04/30/2003
U.S. District Court Civil Docket
Type: Docket		Date on the document: 09/19/2003

OTHER DOCUMENTS
Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Howard Gunty, Inc. Profit Sharing Plan, et al. v. Capstead Mortgage Corporation, et al.
Type: Complaint		Date on the document: 07/31/1998
U.S. District Court Civil Docket
Case Name and/or Number: Wiggin, et al v. Capstead Mortgage, et al
Type: Docket		Date on the document: 08/18/1998
Docket
Case Name and/or Number: Kopelman v. Capstead Mortgage, et al
Type: Docket		Date on the document: 08/20/1998
U.S. District Court Civil Docket
Case Name and/or Number: Lanzillotti v. Capstead Mortgage, et al
Type: Docket		Date on the document: 08/27/1998
U.S. District Court Civil Docket
Case Name and/or Number: Markewich v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/01/1998
U.S. District Court Civil Docket
Case Name and/or Number: Kachulis v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/15/1998
U.S. District Court Civil Docket
Case Name and/or Number: Peckerman, et al v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/15/1998
U.S. District Court Civil Docket
Case Name and/or Number: Howard Gunty Inc v. Capstead Mortgage, et al
Type: Other		Date on the document: 09/16/1998
U.S. District Court Civil Docket
Case Name and/or Number: Levy, et al v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/19/1998
Docket
Case Name and/or Number: Rozenfeld v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/23/1998
Docket
Case Name and/or Number: Weiss v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/23/1998
Docket
Case Name and/or Number: Grimm v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/23/1998
Docket
Case Name and/or Number: Rosenberg v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/23/1998
Docket
Case Name and/or Number: Mohr, et al v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/23/1998
U.S. District Court Civil Docket
Case Name and/or Number: Love v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/23/1998
U.S. District Court Civil Docket
Case Name and/or Number: Aker v. Capstead Mortgage, et a
Type: Docket		Date on the document: 09/23/1998
U.S. District Court Civil Docket
Case Name and/or Number: Zucker v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/23/1998
U.S. District Court Civil Docket
Case Name and/or Number: Missry v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/26/1998
U.S. District Court Civil Docket
Case Name and/or Number: Gerstle v. Capstead Mortgage, et al
Type: Docket		Date on the document: 09/29/1998
Docket
Case Name and/or Number: Streit v. Capstead Mortgage, et al
Type: Docket		Date on the document: 10/01/1998
U.S. District Court Civil Docket
Case Name and/or Number: Nally, et al v. Capstead Mortgage, et al
Type: Docket		Date on the document: 10/01/1998
U.S. District Court Civil Docket
Case Name and/or Number: Med-Plan Inc, et al v. Capstead Mortgage, et al
Type: Docket		Date on the document: 10/02/1998

WARNING AND DISCLAIMER OF LIABILITY:
The information included on this Web site, whether provided by personnel employed by Stanford Law School or by third parties, is provided for research and teaching purposes only. Neither Stanford University, Stanford Law School, nor any of their employees, agents, contractors, or affiliates warrant the accuracy or completeness of the information or analyses displayed herein, and we caution all readers that inclusion of any information on this site does not constitute an endorsement of the truthfulness or accuracy of that information. In particular, this Web site contains complaints and other documents filed in federal and state courts, which make allegations that may or may not be accurate. No reader should, on the basis of information contained in or referenced by this Web site, assume that any of these allegations are truthful.

Go to Search page | Go to Case Index page | Back to Top

�