According to a press release dated January 11, 2008, the Complaint alleges that during the Class Period, MBIA and the individual defendants, Chief Executive Officer and Chief Financial Officer, violated the federal securities laws by issuing false and misleading press releases, financial statements, filings with the SEC and statements during investor conference calls. The Complaint alleges that, throughout the Class Period, Defendants misrepresented and/or failed to disclose the true extent of MBIA's exposure to losses stemming from MBIA's insurance of residential mortgage-backed securities ("RMBS"), including in particular its exposure to so-called "CDO-squared" securities that are backed by RMBS. This highly risky exposure was belatedly disclosed in a series of public statements beginning on December 19, 2007 and ending on January 9, 2008, the last day of the Class Period. One analyst observed that MBIA had withheld from the public the riskiest parts of its insured portfolio, while others expressed similar dismay at MBIA's failure to apprise investors of these risks in a timely manner.
The Complaint alleges that the Defendants violated Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder and that [individual] Defendants violated Section 20(a) of the Exchange Act.
On July 07, 2008, in a Case Management Order, the Court determined that the Teachers' Retirement System of Oklahoma is the most adequate plaintiff to represent the purchasers of MBIA securities. The Court approved the law firm of Bernstein, Litowitz, Berger, and Grossman as the selection of this qualified counsel as lead for the consolidated action. The master file shall be Case No. 08-CV-264 (KMK).
On October 17, 2008, a consolidated amended complaint was filed by the plaintiffs against the defendants.
On March 11, 2008, several motions to appoint lead plaintiff and to approve the selection of lead counsel were filed.
On March 31, 2010, the Defendants' Motion to Dismiss was granted in part and denied in part. Lead Plaintiff's claims against Dunton and Chaplin are dismissed without prejudice to amendment. Lead Plaintiff's claims against all Defendants regarding alleged misstatements or omissions involving control rights and payment obligations are also dismissed without prejudice. Defendants' Motion to Dismiss all other claims was denied.
On September 21, 2011, a court’s order granted the lead plaintiff’s motion for preliminary approval for the proposed settlement.
On September 30, 2011, the lead plaintiff’s entered a notice of voluntary dismissal pursuant to F.R.C.P. 41(a)(1) of the claims and allegations against the individual defendants.
On September 6, 2011, a Stipulation of Settlement was struck between the parties that set forth the terms of the agreement.
On December 19, 2011, an Order Approving Plan of Settlement of Net Settlement Fund; an Order Awarding Attorneys’ Fees and Expenses; and the subsequent Judgment Approving Class Action Settlement was issued by the Court.