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Case Status:    DISMISSED    
On or around 08/15/2005 (Other)

Filing Date: January 21, 2004

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.

COMPANY INFORMATION:

Sector: Financial
Industry: Consumer Financial Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: ABFI
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. Pennsylvania
DOCKET #: 04-CV-265
JUDGE: Hon. Harvey Bartle
DATE FILED: 01/21/2004
CLASS PERIOD START: 01/27/2000
CLASS PERIOD END: 06/25/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cauley Geller Bowman Coates & Rudman, LLP (New York)
  2. Law Offices of Brian M. Felgoise, P.C.
  3. Law Offices of Charles J. Piven, P.A.
  4. Law Offices of Marc S. Henzel (Lawrence)
  5. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
  6. Murray, Frank & Sailer LLP
  7. Schiffrin & Barroway LLP
No Document Title Filing Date
COURT: E.D. Pennsylvania
DOCKET #: 04-CV-265
JUDGE: Hon. Harvey Bartle
DATE FILED: 08/19/2004
CLASS PERIOD START: 01/27/2000
CLASS PERIOD END: 06/26/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Geller Rudman, PLLC.
    197 South Federal Highway, Suite 200, Geller Rudman, PLLC., FL 33432
    561.750.3000 888.262.3131 · info@geller-rudman.com
  2. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
No Document Title Filing Date
No Document Title Filing Date