According to the complaint, this is a class action on behalf of purchasers of First Marblehead securities between November 4, 2010 through August 15, 2013, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).
First Marblehead is a specialty finance company focused on education loanprograms 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.
On March 31, 2009, the Company completed the sale of the trust certificate of NC Residuals Owners Trust (the “Trust Certificate”). The sale generated a cash refund of income taxes previously paid of $189.3 million.
Throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and financial performance. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company’s tax treatment for its sale of the Trust Certificate and similarly situated securities was inappropriate; (2) such treatment exposed the Company to significant liability, threatening the viability of the Company; (3) the Company lacked adequate internal controls over financial reporting; and (4) as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times.
As a result of Defendants' wrongful acts and omissions, and the precipitous decline in the market value of the Company's securities, Plaintiff and other Class members have suffered significant losses and damages.
On December 18, 2013, the Court issued an Order appointing lead plaintiff and approving lead counsel. Lead Plaintiff filed an amended complaint on February 20, 2014.
On October 18, 2014, the Court issued an Order allowing Defendant's Motion to Dismiss.