iStar Financial Inc. - Securities Class Action

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Copyright (c) 2001
Stanford Law School

iStar Financial Inc. Summary: According to a press release dated April 14, 2008, a class action has been commenced on behalf of purchasers of the common stock of iStar Financial Inc. pursuant and/or traceable to the Company’s secondary public offering on or about December 13, 2007, seeking to pursue remedies under the Securities Act of 1933. Specifically, the complaint charges iStar Financial and certain of its officers and directors with violations of the Securities Act. iStar Financial operates as a finance company focusing on the commercial real estate industry.

According to the complaint, on or about October 9, 2007, iStar Financial filed a Form S-3 Shelf Registration Statement with the Securities and Exchange Commission. On or about December 13, 2007, iStar Financial filed a Prospectus Supplement to the Shelf Registration Statement (the “Registration Statement”) with respect to the secondary offering, which forms part of the Registration Statement, and more than 8 million shares of iStar Financial common stock were sold to the public at $28.41 per share, thereby raising more than $227 million.

The complaint alleges that the Registration Statement negligently failed to disclose that the Company was then being negatively impacted by the adverse conditions in the credit markets and was failing to recognize more than $200 million of losses on its corporate loan and debt portfolio.

On February 28, 2008, iStar Financial issued a press release announcing its financial results for the fourth quarter of 2007 and fiscal year 2007, the period ending December 31, 2007. For the fourth quarter, the Company reported a loss of ($78.7 million) or ($0.62) per share. The Company further reported that its fourth quarter financial results were impacted by $134.9 million of charges associated with the “impairment of two credits” and that the Company had increased its loan loss provisions by $113 million. In response to this announcement and subsequent analyst downgrades, the price of iStar Financial stock declined from $22.85 per share on February 27, 2008, to $13.98 per share on March 6, 2008.

According to the Company’s FORM 10-Q for the quarterly period ended June 30, 2009, in April 2008, two putative class action complaints were filed in the United States District Court for the Southern District of New York naming the Company and certain of its current and former executive officers as defendants and alleging violations of the Securities Act of 1933, as amended. Both suits were purportedly filed on behalf of the same putative class of investors who purchased common stock in the Company's December 13, 2007 public offering (the "Company's Offering"). The two complaints were consolidated in a single proceeding (the "Citiline Action") on April 30, 2008.

On November 17, 2008, Plumbers Union Local No. 12 Pension Fund and Citiline Holdings, Inc. were appointed Lead Plaintiffs to pursue the Citiline Action. Plaintiffs filed a Consolidated Amended Complaint on February 2, 2009, purportedly on behalf of a putative class of investors who purchased iStar common stock between December 6, 2007 and March 6, 2008 (the "Complaint"). The Complaint named as defendants the Company, certain of its current and former executive officers, and certain investment banks who served as underwriters in the Company's Offering. The Complaint reasserted claims for alleged violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, and added claims for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. Plaintiffs allege the defendants made certain material misstatements and omissions relating to the Company's continuing operations, including the value of the Company's loan portfolio and certain debt securities held by the Company. The Complaint seeks certification as a class action, unspecified compensatory damages plus interest and attorneys fees, and rescission of the public offering. No class has been certified and discovery has not begun. The Company and its current and former officers filed a motion to dismiss the Complaint on April 27, 2009. On March 26, 2010, Judge Richard J. Sullivan denied the defendants’ motion to dismiss. This action is now in mediation.

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

COMPANY/ISSUER NAME:	iStar Financial Inc.
COMPANY/ISSUER TICKER:	SFI
COMPANY WEBSITE:	http://www.istarfinancial.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Citiline Holdings Inc., et al. v. iStar Financial Inc., et al.

COURT: S.D. New York	DOCKET NUMBER: 08-CV-03612
JUDGE NAME: Hon. Robert W. Sweet
DATE FILED: 04/14/2008	SOURCE: Notice of Filing
CLASS PERIOD START: 12/13/2007	CLASS PERIOD END: 02/28/2008
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Abraham, Fruchter & Twersky (New York, 42 Street) 60 East 42 Street, New York, NY, 10021 (voice) 212.687.6655, (fax) , 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: 2

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violation of Federal Securities Laws - Demand for Jury Trial
Type: Complaint		Date on the document: 04/14/2008

REFERENCE COMPLAINT

Citiline Holdings Inc., et al. v. iStar Financial Inc., et al.

COURT: S.D. New York	DOCKET NUMBER: 08-CV-03612
JUDGE NAME: Hon. Robert W. Sweet
DATE FILED: 02/02/2009	SOURCE: Docket
CLASS PERIOD START: 12/06/2007	CLASS PERIOD END: 03/06/2008
TYPE OF COMPLAINT: Consolidated Complaint
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza) One Pennsylvania Plaza, Suite 1910, New York, NY, 10119 (voice) 212.279.5050, (fax) 212.279.3655, JFruchter@FruchterTwersky.com 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: 2

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Class Action Complaint For Violations Of Federal Securities Laws
Type: Complaint		Date on the document: 02/02/2009
Memorandum And Order
Type: Order		Date on the document: 03/26/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 10/28/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 06/22/2011

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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