Radian Group Inc. - Securities Class Action

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Radian Group Inc. Summary: The original complaint charges Radian and certain of its officers and directors with violations of the Exchange Act. Radian operates, through its subsidiaries and affiliates, as a credit enhancement company that provides credit protection products and financial services to mortgage lenders and other financial institutions. One of Radian’s principal affiliates is Credit-Based Asset Servicing and Securitization, known as C-BASS. C-BASS is an investor in the credit risk of subprime single-family residential mortgages. Specifically, the complaint alleges that, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose: (i) that the Company’s $468 million investment in C-BASS was materially impaired as C-BASS was experiencing increasing margin calls and C-BASS’s investments were declining in value at a significant rate; (ii) that the Company was materially overstating its financial results by failing to properly value its investment in C-BASS and by failing to write-down that investment in a timely fashion; and (iii) as a result of the foregoing, the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) and, therefore, were materially false and misleading.

The complaint further alleges that on July 30, 2007, after the market closed, Radian issued a press release announcing that “it has concluded that the value of its investment in” C-BASS has been “materially impaired.” The Company further disclosed that its investment in C-BASS consists of approximately $468 million of equity as of June 30, 2007 and an additional $50 million drawn on July 20 and 23, 2007 under a $50 million unsecured credit facility that Radian provides to C-BASS. The Company also represented that although it had not determined the level of the impairment charge it “could be Radian’s entire investment, less any associated tax benefit.” In response to this announcement, the price of Radian common stock declined from $40.20 per share to $33.71 per share on extremely heavy trading volume.

Then, on July 31, 2007, before the market opened, C-BASS issued a press release concerning Radian’s announcement of the impairment charge. According to C-BASS, at the beginning of 2007, it had $302 million of liquidity, representing more than 30% of its capital of $926 million. Thereafter, as 2007 unfolded and the subprime mortgage market crisis deepened, C-BASS received and met $290 million in margin calls from its lenders, leaving it with virtually no liquidity. However, the margin calls kept coming into C-BASS and C-BASS did not have the liquidity to meet them. In response to this announcement, the price of Radian stock declined from $33.71 per share to $27.51 per share on extremely heavy trading volume.

According to the Company’s FORM 10-Q for the quarterly period ended March 31, 2009, in August and September 2007, two purported stockholder class action lawsuits, Cortese v. Radian Group Inc. and Maslar v. Radian Group Inc., were filed against Radian Group and individual defendants in the U.S. District Court for the Eastern District of Pennsylvania. The complaints, which are substantially similar, allege that we were aware of and failed to disclose the actual financial condition of C-BASS prior to our declaration of a material impairment to our investment in C-BASS. On January 30, 2008, the court ordered that the cases be consolidated into In re Radian Securities Litigation. On April 16, 2008, a consolidated and amended complaint was filed, adding one additional defendant. On June 6, 2008, we filed a motion to dismiss this case, which was granted on April 9, 2009. On April 22, 2009, plaintiffs filed a motion seeking an extension of time within which to move to amend their complaint; and, on May 6, 2009, we filed an opposition to this motion, arguing, among other things, that the April 9 dismissal did not provide for future amendment of the dismissed complaint. The court has not ruled on this motion. On May 8, 2009, plaintiffs filed a motion to appeal the court’s dismissal of the action to the United States Court of Appeals for the Third Circuit.

On May 22, 2009, the Court granted the plaintiffs’ motion for entry of a scheduling order. The Court did not intend its dismissal of the complaint to be with prejudice. Plaintiffs may file an amended complaint with thirty dates of this order. On July 10, 2009, the lead plaintiff filed a Consolidated Amended Class Action Complaint. On August 24, 2009, the defendants responded by filing a motion to dismiss the onsolidated Amended Class Action Complaint.

On January 8, 2010, Honorable Mary A. McLaughlin denied the defendants’ August 24, 2009 motion for sanctions. On January 11, 2010, the lead plaintiff filed a Corrected Consolidated Amended Class Action Complaint. On May 3, 2010, Judge McLaughlin granted the defendants' motion to dismiss and dismissed the action with prejudice.

INDUSTRY CLASSIFICATION:
SIC Code: 6351
Sector: Financial
Industry: Insurance (Prop. & Casualty)

COMPANY/ISSUER NAME:	Radian Group Inc.
COMPANY/ISSUER TICKER:	RDN
COMPANY WEBSITE:	http://www.radiangroupinc.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

John Cortese, et al. v. Radian Group Inc., et al.

COURT: E.D. Pennsylvania	DOCKET NUMBER: 07-CV-3375
JUDGE NAME: Hon. Mary A. McLaughlin
DATE FILED: 08/15/2007	SOURCE: Notice of Filing
CLASS PERIOD START: 01/23/2007	CLASS PERIOD END: 07/31/2007
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Law Offices of Bernard M. Gross (Philadelphia) 1515 Locust Street, 2nd Floor, Philadelphia, PA, 19102 (voice) 215-561-3600, (fax) 215-561-3000, bmgross@bernardmgross.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville) 58 South Service Road, Suite 200, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, Schiffrin Barroway Topaz & Kessler, LLP (Radnor) 280 King of Prussia Road, Radnor, PA, 19087 (voice) 610.667.7706, (fax) 610.667.7056, info@sbtklaw.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Type: Complaint		Date on the document: 08/15/2007
Memorandum & Order
Type: Order of Consolidation		Date on the document: 01/30/2008

REFERENCE COMPLAINT

In Re Radian Securities Litigation

COURT: E.D. Pennsylvania	DOCKET NUMBER: 07-CV-3375
JUDGE NAME: Hon. Mary A. McLaughlin
DATE FILED: 01/11/2010	SOURCE: Docket
CLASS PERIOD START: 01/23/2007	CLASS PERIOD END: 08/07/2007
TYPE OF COMPLAINT: First Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Coughlin Stoia Geller Rudman & Robbins LLP (Melville) 58 South Service Road, Suite 200, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, info@csgrr.com/ _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Class Action Complaint for Violations of Federal Securities Laws
Type: Complaint		Date on the document: 04/16/2008
Memorandum and Order
Type: Order		Date on the document: 04/09/2009
Consolidated Amended Class Action Complaint for Violations of Federal Securities Laws
Type: Complaint		Date on the document: 07/10/2009
Corrected Consolidated Amended Class Action Complaint For Violations Of Federal Securities Laws
Type: Complaint		Date on the document: 01/11/2010
Memorandum
Type: Memorandum		Date on the document: 05/03/2010
Order
Type: Order		Date on the document: 05/03/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 05/03/2010

OTHER DOCUMENTS
Class Action Complaint - Jury Trial Demanded
Case Name and/or Number: William Maslar, et al. v. Radian Group Inc., et al.
Type: Complaint		Date on the document: 09/11/2007

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