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MGIC Investment Corporation
On May 12, 2008, Zwerling, Schachter & Zwerling, LLP ("Zwerling
Schachter") filed a class action lawsuit in the United States
District Court for the Eastern District of Michigan on behalf of
all persons and entities who purchased or otherwise acquired the
securities of MGIC Investment Corporation ("MGIC" or the
"Company") (NYSE: MTG) during the period from February
6, 2007 through February 12, 2008, inclusive (the "Class Period").
MGIC operates, through its subsidiaries and
affiliates, as a credit enhancement company that provides credit
protection products and financial services to mortgage lenders and
other financial institutions. One of MGIC's affiliates is Credit-Based
Asset Serving and Securitization ("C-BASS"), which is
engaged in the business of investing in credit-sensitive residential
mortgage assets.
The complaint alleges that defendants violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder. Specifically the complaint
alleges that defendant issued false and materially misleading statements
that misrepresented and failed to disclose: (a) that the C-BASS
acquisition of Fieldstone adversely affected C-BASS liquidity; (b)
that the Company's $516 million investment in C-BASS was materially
impaired; (c) that the Company's loss reserves were inadequate in
light of the worsening housing market and increases in defaults
and foreclosures; (d) that the Company's Wall Street bulk transaction
business was experiencing substantial losses and no reserves were
established to absorb these losses; and (e) that, because of the
increases in losses and drain on liquidity, the Company was not
adequately capitalized.
The deadline to file a motion seeking to be
appointed lead plaintiff is July 15, 2008.
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In re Citigroup
Auction Rate Securities Litigation
On June 24, 2008, Judge Laura Taylor Swain of the United States
District Court for the Southern District of New York issued an order
appointing Dr. Michael A. Passidomo lead plaintiff in the class
action pending against Citigroup Inc. (NYSE: C), Citigroup Global
Markets, Inc. and Citi Smith Barney (the “Defendants”)
on behalf of investors in auction rate securities purchased from
Defendants. Judge Swain appointed Zwerling, Schachter & Zwerling,
LLP (“Zwerling Schachter”) to serve as Lead Counsel for
the proposed class.
The first of the lawsuits involving the purchase
of auction rate securities from Defendants was filed in March 2008.
The suits, which were consolidated by the Court, allege that since
April 2002 Defendants deceived investors about the risks of auction
rate securities by, among other things, falsely marketing auction
rate securities as cash equivalents that were highly safe and liquid
investments. However, as alleged in the complaints, auction rate
securities are complex financial instruments that only appeared
liquid and stable because Defendants were artificially supporting
and manipulating the market. The auction rate securities market
collapsed on February 13, 2008 after Defendants withdrew their support,
rendering investors’ auction rate securities illiquid and worth
substantially less than par value.
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MF Global, Ltd.
We filed a class action lawsuit in the
United States District Court for the Southern District of New York
on behalf of all persons and entities who purchased or acquired
the common stock of MF Global, Ltd. ("MF" or the "Company")
(NYSE: MF) pursuant or traceable to the Company's July 19, 2007
initial public offering of approximately 97.4 million shares at
$30.00 per share (the "IPO") and through February 28,
2008 (the "Class Period") and who suffered damages (the
"Class"). The complaint alleges that certain representations
made by the defendants in connection with the IPO contained statements
that were materially false and misleading, or omitted to state other
facts necessary to make the statements made not misleading, because:
(1) the Company's risk management infrastructure including its policies,
procedures and systems were deficient; (2) the Company misrepresented
that clients open positions and margin levels were monitored on
a real time basis with its sophisticated technical system and oversight;
(3) the Company's risk management controls were suspended or eliminated
to speed up certain trades; (4) the Company eliminated credit and
risk analysis, buying power limits and controls which allowed an
MF representative to place orders disregarding margin requirements;
and (5) that, as a result of the foregoing, the Registration Statement
and Prospectus were false and misleading at all relevant times.
The deadline to file a motion seeking to
be appointed lead plaintiff is May 9, 2008.
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Virgin Mobile
USA, Inc.
We filed a class action lawsuit in the United
States District Court for the Southern District of New York on behalf
of all persons and entities who purchased or acquired the common
stock of Virgin Mobile USA, Inc. ("Virgin Mobile" or the
"Company") (NYSE: VM) pursuant and/or traceable to the
Company's October 11, 2007 initial public offering of 27.5 million
shares at $15.00 per share (the "IPO") and who suffered
damages (the "Class"). The complaint alleges that the
Company's Registration Statement and Prospectus ("Registration
Statement/Prospectus") filed with the SEC on or about October
10, 2007 contained statements that were materially false and misleading,
or omitted to state other facts necessary to make the statements
made not misleading, because: (1) the Company had already suffered
a larger than expected third quarter loss for the period ended September
30, 2007; (2) the Company was experiencing weakening demand for
its services at the time of the IPO; (3) the Company's cost structure
at the time of the IPO was too high for the Company to operate profitably;
and (4) that, as a result of the foregoing, the Registration Statement/Prospectus
was materially false and misleading.
The deadline to file a motion seeking to be appointed lead plaintiff
is January 22, 2008.
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Security Capital
Assurance, Ltd.
We filed a class action lawsuit in the United
States District Court for Southern District of New York on behalf
of all persons and entities who purchased the common stock of Security
Capital Assurance, Ltd. ("Security Capital" or the "Company")
(NYSE: SCA) pursuant to the Company's secondary stock offering on
June 6, 2007 of more than 9.6 million shares at $31.00 per share.
Security Capital, through its subsidiaries, provides financial guaranty
insurance, reinsurance, and other credit enhancement products to
the public finance and structured finance markets in the United
States and internationally.
The complaint alleges that defendants violated Sections 11 and 15
of the Securities Act of 1933. Specifically, the complaint alleges
that the Registration Statement and Prospectus filed with the Securities
& Exchange Commission in connection with the secondary offering
contained untrue statements of material facts because they failed
to disclose that: a substantial portion of the Company's credit
portfolio related to sub-prime residential mortgage backed securities
("RMBS") and collateralized debt obligations ("CDOs")
that had declined substantially in value; 2) the Company's net loss
reserves were inadequate in light of the Company's deteriorating
credit portfolio; 3) the Company's credit default swaps were not
fairly valued at the time of the secondary offering; and 4) as a
result of the Company's imprudent underwriting, inadequate loss
reserves and overvaluation of its credit default swaps, the Company's
AAA credit rating was at risk of being downgraded. As a result of
these omissions, persons who purchased the Company's common stock
pursuant to the secondary offering paid materially more than what
the shares were worth.
The deadline to file a motion seeking to
be appointed lead plaintiff is February
5, 2008.
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Syntax-Brillian
Corp.
We filed a class action lawsuit in the United
States District Court for District of Arizona on behalf of all persons
and entities who purchased the common stock of Syntax-Brillian Corp.
("Syntax-Brillian" or the "Company") (NASD:
BRLC) pursuant to a public offering of approximately 25.6 million
shares at $5.75 per share on May 24, 2007. The complaint alleges
that defendants violated Sections 11, 12(a)(2) and 15 of the Securities
Act of 1933. Specifically, the complaint alleges that the registration
statement and prospectus filed with the SEC in connection with the
May 24, 2007 public offering contained materially false and misleading
statements, or omitted to state other facts necessary to make the
statements made not misleading, concerning Syntax-Brillian's revenue
growth, profitability, and its business in China. On September 12,
2007, Syntax-Brillian announced that the results for its first quarter
2008, ending on September 30, 2007, would be significantly below
expectations. The Company projected first quarter 2008 revenues
of between $170-180 million, when analysts were expecting the Company
to report revenues of $254 million, a shortfall of more than 25%.
On November 11, 2007, the Company announced that revenues for the
quarter ended September 30, 2007, was $150.6 million, a decline
of 26.6% from the previous quarter, and that revenue from China
in the quarter was $14.6 million, compared with $96.8 million in
the prior quarter, a decline of approximately 85%.
The deadline to file a motion seeking to
represent the class is April 7, 2008.
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