According to the docket, on May 19, 2008 the judge entered an order of dismissal with prejudice, in favor of the defendants.
On May 8, 2006, the Court entered the Order by Judge Cormac J. Carney consolidating the cases under caption In re Impac Mortgage Holdings, Inc Securities Litigation. The Jones Group’s motion for appointment as lead Plaintiff was granted and its chosen counsel, Lerach, Coughlin, Stoia, Geller, Rudman and Robbins LLP, was appointed lead counsel. On July 24, 2006, the plaintiffs filed a Consolidated Complaint. On October 13, 2006, the defendants filed motions to dismiss the Consolidated Complaint.
The original Complaint charges defendants, the Company as well as certain senior officers and directors, with violations of 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, the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company lacked an adequate internal system of controls necessary to accurately ascertain the Company's overall condition; (2) that the Company's quarterly guidance concealed the true financial health of the Company; (3) that as a consequence of the foregoing, the Company's statements with respect to its future prospects and the intrinsic value of its business lacked in all reasonable basis.
The complaint alleges that while the Company was unabashedly positive in its public statements, the defendants knew but failed to reveal that material indicators of the Company's true financial condition would be lower than expected for the second fiscal quarter of 2005, as compared to previous quarters. Rather than disclose this adverse information to investors, Company insiders, including defendants, took the opportunity to sell more than 300,000 shares of their personally held Company stock, reaping more than $5.5 million in proceeds. Shortly thereafter, on August 9, 2005, IMH shocked the market, revealing that it was posting a net loss of $55 million, or 78 cents per share, compared to a profit of $143.2 million, or $2.17 per share, a year earlier and forecasted a reduced dividend of .50 cents to .60 cents a share in the third quarter (down from the previous .75 cents per share). On this news, IMH shares plunged approximately 40% from a Class Period high of $22.32 to close at $13.46 on August 10, 2005 on volume of nearly 6.5 million shares -- or roughly 13 times above average daily volume.
IMH is a mortgage real estate investment trust ("REIT") that acquires, originates, sells and invests primarily in non-conforming, Alt-A mortgages, small-balance, multi-family mortgages, and sub-prime or B/C mortgages. The Company also provides warehouse and repurchase financing to originators of mortgages.