American Business Financial Services, Inc. - Securities Class Action

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Copyright (c) 2001
Stanford Law School

American Business Financial Services, Inc. Conclusion: According to a press release dated June 9, 2005, in a ruling that strictly enforces the "particularity" requirements of the Private Securities Litigation Reform Act, a federal judge has dismissed a class action suit against top executives at American Business Financial Services Inc. after finding that the plaintiffs lacked detailed evidence to back up their claim that false and misleading statements were made to investors. In the suit, investors allege that ABFS - a now-bankrupt financial services company that specialized in home equity loans - used improper accounting practices to hide its high rate of delinquent loans.

The Complaint alleges that defendants ABFI violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. More specifically, the Complaint alleges that, during the Class Period, defendants failed to disclose and indicate (1) the Company used a deception to take homes from delinquent borrowers in order keep its delinquency rate low; (2) that the deception allowed the Company to skip the normal foreclosure process more frequently; (3) that the deception helped the Company to reduce its delinquency rate in its $3.6 billion loan portfolio; (4) as result of reducing its delinquency rate in its $3.6 billion loan portfolio, the Company was able to securitize more loans; and (5) were thus able to collect interest income from its securitized loans and inflate its financial results.

Further, the press release said that, on June 13, 2003, the Company disclosed that it had received a civil subpoena from the U.S. Department of Justice requesting that ABFI provide documents relating to mortgage loan transactions and securitization agreements. On news of this, shares of ABFI fell 20% to close at $8.27 per share. On June 26, 2003, ABFI disclosed that it anticipated incurring a loss for the quarter and year ended June 30, 2003 due to its inability to complete its quarterly securitization of loans. On news of this, shares of ABFI fell 12% to close at $7.40 per share.

INDUSTRY CLASSIFICATION:
SIC Code: 6162
Sector: Financial
Industry: Consumer Financial Services

COMPANY/ISSUER NAME:	American Business Financial Services, Inc.
COMPANY/ISSUER TICKER:	ABFI
COMPANY WEBSITE:	http://www.abfsonline.com/

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Weisinger, et al. v. American Business Financial Services, Inc., et al.

COURT: E.D. Pennsylvania	DOCKET NUMBER: 04-CV-265
JUDGE NAME: Hon. Harvey Bartle
DATE FILED: 01/21/2004	SOURCE: Complaint
CLASS PERIOD START: 01/27/2000	CLASS PERIOD END: 06/25/2003
TYPE OF COMPLAINT: Unamended/Unconsolidated
PLAINTIFF FIRMS IN THIS OR SIMILAR CASE:
Cauley Geller Bowman Coates & Rudman, LLP (New York) 200 Broadhollow, Suite 406, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, Law Offices of Brian M. Felgoise, P.C. Esquire at 261 Old York Road, Suite 423, Jenkintown, PA, 19046 (voice) 215.886.1900, (fax) , securitiesfraud@comcast.net Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Law Offices of Marc S. Henzel 335 Central Avenue, Lawrence, NY, 11559 (voice) 516.374.0707, (fax) 516.295.3473, securitiesfraud@comcast.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 Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr, New York, NY, 10016 (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 7

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 01/23/2004
U.S. District Court Civil Docket
Type: Docket		Date on the document: 07/13/2004

REFERENCE COMPLAINT

Weisinger, et al. v. American Business Financial Services, Inc., et al.

COURT: E.D. Pennsylvania	DOCKET NUMBER: 04-CV-265
JUDGE NAME: Hon. Thomas O'Neill
DATE FILED: 08/19/2004	SOURCE: Business Wires
CLASS PERIOD START: 01/27/2000	CLASS PERIOD END: 06/25/2003
TYPE OF COMPLAINT: Consolidated and/or Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Geller Rudman, PLLC. 197 South Federal Highway, Suite 200, Boca Raton, FL, 33432 (voice) 561.750.3000, (fax) 888.262.3131, info@geller-rudman.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE REFERENCE COMPLAINT
Memorandum and Order
Type: Memorandum		Date on the document: 06/02/2005
U.S. District Court Civil Docket
Type: Docket		Date on the document: 09/22/2005

OTHER DOCUMENTS
Class Action Complaint
Case Name and/or Number: Ruane
Type: Complaint		Date on the document: 01/28/2004

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