IndyMac Bancorp Inc. Summary: The original complaint was filed against IndyMac and certain of its officers and/or directors for violations of the Securities Exchange Act of 1934. IndyMac Bancorp, Inc. operates as the holding company for IndyMac Bank, F.S.B., a thrift/mortgage bank, which provides mortgage products and services, including adjustable-rate mortgages, fixed-rate mortgages, construction-to-permanent loans, subprime mortgages, and reverse mortgages.
Specifically, the complaint alleges that during the Class Period, defendants issued materially false and misleading statements concerning the Company's business and financial results. As a result of defendants' failure to fully disclose problems with the Company's internal controls and loan loss provisions, IndyMac stock traded at artificially inflated prices during the Class Period, reaching a high of $50.11 per share in May 2006.
Throughout the Class Period, defendants issued public statements which touted the Company's business and financial performance, but which failed to fully disclose problems with the Company's internal controls and underwriting practices and that the Company maintained inadequate provisions for loan losses. These partial disclosures only hinted at the Company's problems, and had the effect of maintaining IndyMac's stock price at inflated levels during the Class Period. At the end of the Class Period, as the news of the Company's problems seeped into the market, IndyMac's share price dropped following each revelation.
The complaint further alleges that on March 1, 2007, IndyMac issued a press release in which a "Letter to Shareholders" acknowledged, among other thing, problems with the Company's underwriting practices and loan delinquencies.
That same day, March 1, 2007, as a result of this news, IndyMac's stock dropped from $34.33 to a close of $32.16 per share, on volume of more than 9.6 million shares, four times the average three-month volume.
On June 19, 2007, the Court entered the minutes of the motion hearing held before Judge George H. Wu. At the hearing, the Court granted the motion of the Tripp Group to be appointed Lead Plaintiff and for approval of the Lead and Liaison Counsels. The Court further granted leave for further submission as to complexity of case as to whether or not there should be co-lead counsel. On September 7, 2007, the plaintiffs filed an Amended Complaint and the defendants responded by filing a motion to dismiss the Amended Complaint. On November 29, 2007, Judge George Wu granted the defendants’ motion to dismiss the securities class action lawsuit that had been filed against Indymac and three individual defendants. The dismissal is without prejudice, and the plaintiffs have until January 18, 2008 to file an amended complaint.
The lead plaintiffs filed a Second Amended Class Action Complaint on January 18, 2008. The plaintiffs voluntarily dismissed one of the individual defendants. Defendants again moved for dismissal on February 19, 2008. On May 5 the judge again granted the motion to dismiss without prejudice and provided plaintiffs with the opportunity to re-file the complaint addressing various pleading deficiencies.
The lead plaintiffs filed a Third Amended Class Action Complaint on June 6, 2008. The defendants responded by filing a motion to dismiss on July 1, 2008. IndyMac filed for bankruptcy under Chapter 7 on August 2, 2008. IndyMac's CEO filed a motion to stay proceedings against him as a result of IndyMac's pending bankruptcy proceedings. His motion was denied on October 16, 2008. On April 20, 2009, Judge George H. Wu granted the defendants’ motion to dismiss as to the hedging issue. On May 11, 2009, Judge Wu granted the defendants’ motion to dismiss with leave to amend.
On June 1, 2009, the lead plaintiffs filed a Fourth Amended Class Action Complaint. The defendants filed a motion to dismiss the Amended Class Action Complaint. On September 24, 2009, Defendant Michael W. Perry's Motion to Dismiss Plaintiffs' Fourth Amended Class Action Complaint is granted with leave to amend. On October 5, 2009, the lead plaintiffs filed a Fifth Amended Class Action Complaint. On October 26, 2009, the defendant filed a motion to dismiss the complaint. On December 11, 2009, Judge George H. Wu denied the defendant’s motion.
On February 16, 2010, the plaintiffs filed a Sixth Amended Class Action Complaint. According to the Order signed by Judge George H. Wu on March 29, 2010, the Court now converts defendant Michael W. Perry’s motion to dismiss the Fifth Amended Class Action Complaint into a motion to dismiss the Sixth Amended Class Action Complaint, formally denies the motion to dismiss the Sixth Amended Class Action Complaint, and simultaneously incorporates into this ruling the first two paragraphs from the tentative ruling issued December 10, 2009, and made final December 11, 2009, which addressed the prior iteration of Plaintiffs’ complaint. Finally, for the reasons addressed in the tentative ruling issued February 1, 2010 (Docket No. 224) and adopted as this Court’s final ruling on March 22, 2010 (Docket No. 242), this ruling on the motion to dismiss the Sixth Amended Class Action Complaint is now certified for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). The Court finds that the loss causation portion of this Order denying the motion to dismiss the Sixth Amended Class Action Complaint involves controlling questions of law as to which there are substantial grounds for differences of opinion and that an immediate appeal from this Order may materially affect the ultimate termination of the litigation.
On July 27, 2010, Judge George H. Wu granted the motion for partial stay of the action pending mediation.
On August 26, 2011, the lead plaintiff filed a motion to certify the class.
On February 16, 2012, an Order was issued staying this case due to mediation.
SIC Code: 6035
Industry: S&Ls/Savings Banks
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