According to the law firm press release, Altisource provides real estate and mortgage portfolio management and related technology products and asset recovery and customer relationship management services.
The Complaint brings forth claims for violations of the Securities Exchange Act of 1934. The Complaint alleges that 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 prospects.
Specifically, Defendants made false and/or misleading statements and/or failed to disclose material information regarding the Company’s improper business and operational practices including, among other things, the fact that Ocwen Financial Corporation (“Ocwen”), a financial services holding company of which Defendant is Chairman of the Board, was funneling as much as $65 million in fees annually from already-distressed homeowners to Altisource for minimal work; and that Defendant, who owns approximately 27% of Altisource’s shares outstanding, was directly involved in approving Altisource’s conflicted transactions with Ocwen.
Accordingly, Defendants issued materially false and misleading statements and omitted material information from Altisource’s public disclosures, which failed to disclose, among other things, that: (i) Altisource was charging exorbitant fees to Ocwen to enable Defendants to funnel as much as $65 million in questionable fees; (ii) despite public representations to the contrary, Defendant was personally involved in approving conflicted transactions with Altisource and other related entities which he controlled; (iii) the Company failed to comply with applicable laws and regulations, including lending regulations designed to protect homeowners; (iv) the Company’s financial statements during the Class Period were artificially inflated and did not provide a fair presentation of the Company’s finances and operations; (v) the Company lacked adequate internal and financial controls; and (vi) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times.
The parties entered into a Stipulation of Settlement on February 8, 2017. This Settlement was preliminarily approved on February 10. On May 30, 2017, the Court granted final approval of the Settlement and entered Final Judgment. On August 7, 2018, the Court issued an Order approving the distribution plan for the Settlement.