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Accredited Home Lenders Holding Company Summary: The original 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.
On June 26, 2007, the Court entered the Order consolidating the related cases, appointing lead plaintiff and appointing lead counsel. On August 24, 2007, the plaintiff filed a Corrected Consolidated Class Action Complaint for Violations of the Federal Securities Laws. On November 2, 2007, the defendants filed a motion to dismiss then Consolidated Class Action Complaint.
On January 4, 2008, the Court entered the Order signed by U.S. District Judge Marilyn L. Huff denying the motion to dismiss. To summarize, the Court denies the motions to dismiss except as follows: 1. The REIT and individual defendants Gunderson, Pratt, Erickson, Espy and Berglund are dismissed from Plaintiffs first claim for relief; 2. Individual defendants Gunderson, Pratt, Erickson, Espy and Berglund are dismissed from Plaintiffs third claim for relief; and, 3. All defendants except Accredited are dismissed from Plaintiffs sixth claim for relief. The Court grants Plaintiff leave to amend the complaint to address the deficiencies identified by this Order. The parties soon after engaged in discovery proceedings.
On February 20, 2009, the lead plaintiff filed a motion to certify the class. On April 16, 2009, the parties notified the Court that a settlement had been reached. As a result, the discovery hearing set for April 20, 2009 and the discovery status conference set for May 4, 2009 are hereby vacated. The parties were directed to file a joint motion to vacate the hearing on the motion for class certification and the scheduling order, and to submit a proposal to District Judge Huff for a further scheduling of settlement procedures.
INDUSTRY CLASSIFICATION:
SIC Code: 6162
Sector: Financial
Industry: Consumer Financial Services
| COMPANY/ISSUER NAME: | Accredited Home Lenders Holding Company |
| COMPANY/ISSUER TICKER: | LEND |
| COMPANY WEBSITE: | http://www.accredhome.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| City of Brockton Retirement System, et al. v. Accredited Home Lenders Holding Company, et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial | |||
| Type: Complaint | Date on the document: 03/16/2007 | ||
| Notice Of Motion And Motion Of The Kansas City Missouri Fire Fighters Trust Fund For Appointment As Lead Plaintiff, Approval Of Its Selection Of Counsel, And Consolidation Of All Related Cases | |||
| Type: Motion | Date on the document: 5/15/2007 | ||
| Notice Of Motion Of The Magness Group To Consolidate Actions, To Be Appointed Lead Plaintiff And For Approval Of Lead Plaintiff's Selection Of Lead Counsel And Liaison Counsel | |||
| Type: Motion | Date on the document: 5/15/2007 | ||
| Order (1) Consolidating Related Cases; (2) Appointing Lead Plaintiff And (3) Appointing Lead Counsel | |||
| Type: Order | Date on the document: 6/25/2007 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| Michael Atlas, et al. v. Accredited Home Lenders Holding Company, et al. | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| Consolidated Class Action Complaint For Violations Of The Federal Securities Laws | |||
| Type: Complaint | Date on the document: 8/23/2007 | ||
| Corrected Consolidated Class Action Complaint for Violations of the Federal Securities Laws | |||
| Type: Complaint | Date on the document: 08/24/2007 | ||
| (1) Denying Accredited's Motion To Dismiss; (2) Granting In Part With Leave To Amend Accredited Mortgage Loan REIT Trust's And The Individual Defendants' Motions To Dismiss; And (3) Denying Plaintiff's Motion To Strike | |||
| Type: Order | Date on the document: 01/04/2008 | ||
| U.S. Civil Court Docket | |||
| Type: Docket | Date on the document: 04/27/2009 | ||
| OTHER DOCUMENTS | |||
| Complaint For Violation Of The Federal Securities Laws | |||
| Case Name and/or Number: City of Brockton Retirement System, et al. v. Accredited Home Lenders Holding Company, et al. | |||
| Type: Complaint | Date on the document: 05/09/2007 | ||
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