The First Marblehead Corporation is an American specialty finance company focused on education loan programs for K-12, undergraduate and graduate students in the United States, as well as tuition planning, tuition billing, refund management and payment technology services. The Company partners with lenders to design and administer education loan programs, which are typically school-certified and designed to be marketed through educational institutions or to prospective student borrowers and their families directly, and to generate portfolios intended to be held by the originating lender or financed in the capital markets. First Marblehead also offers a number of ancillary services in support of its clients, including loan origination, retail banking, portfolio management and securitization services.

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.