The First Marblehead Corporation Securities Litigation
On or around 08/05/2009 (Court's order of dismissal)
Filing Date: April 10, 2008
The lawsuit claims that First Marblehead and a number of individual defendants violated Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. Sections 78j (b) and 78t(a) and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission ("SEC"), 17 C.F.R. Section 240.10b-5.
According to the complaint, the defendants made materially false and misleading statements about the performance and quality of First Marblehead's securitizations in SEC filings and other statements to the investing public. Among other things, First Marblehead misrepresented the level of default rates in its portfolio and the default rates' effect on the Company's ability to securitize additional student loan underwritings. The complaint also states that First Marblehead recklessly disregarded that its student loan guarantor, The Education Resources Institute, was under-reserved and unable to adequately insure student loans underwritten by the Company. The guarantor filed for bankruptcy protection on April 7, 2008.
On August 28, 2008, the Court entered the Order consolidating the action under Lead Case No. 08-10612-JLT and appointing Pembroke Pines Fire and Police Pension Fund and Universal-Investment-Gesellschaft MBH as Lead Plaintiff and the law firm of Motley Rice LLP as Lead Counsel. On November 28, 2008, an Amended Class Action Complaint was filed by the plaintiffs. On February 29, 2009, the defendants filed a motion to dismiss the Amended Class Action Complaint. On August 5, 2009, Judge Joseph L. Tauro signed the Order and Memorandum granting the motion to dismiss. The civil case has been terminated.
Company & Securities Information
Defendant: The First Marblehead Corporation
Industry: Consumer Financial Services
Headquarters: United States
Ticker Symbol: FMD
Company Market: New York SE
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.
First Identified Complaint
Stephen E. Keller, et al. v. The First Marblehead Corporation, et al.