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NEW YORK, June 04, 2015 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Nationstar Mortgage Holdings Inc. (“Nationstar” or the “Company”)(NYSE:NSM) and certain of its officers. The class action, filed in United States District Court, Southern District of Florida, is on behalf of a class consisting of all persons or entities who purchased Nationstar securities between February 27, 2014 and May 4, 2015 inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased Nationstar securities during the Class Period, you have until August 3, 2015 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll free, x9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Nationstar is now the nation’s second largest non-bank subprime mortgage servicer. In this capacity, Nationstar collects mortgage premiums and otherwise services mortgages for loans owned by other entities.
The Complaint alleges that throughout the Class Period, Defendants issued materially false and misleading statements about the Company's business, future revenues, operating results and financial prospects. Nationstar claimed to be improving its profitability as a result of increased servicing revenue on its exponentially expanding Mortgage Servicing Rights ("MSRs") portfolio, leading to servicing fee profits, and as a result of profits being "earned" by its Solutionstar subsidiary, with which it had contracted to provide various loan services. However, Nationstar failed to disclose deficiencies in management control and supervision necessary to ensure the Company's compliance with applicable laws and regulations in connection with the servicing of MSRs, and that Nationstar had been gouging mortgagors and illegally enhancing its profits through illicit practices, such as charging for repeated, unnecessary inspections, which resulted in additional late payment fees, and pressuring mortgagors to carry out expensive modifications and refinances on their mortgages. In addition, heightened regulatory scrutiny into MSR transferring and servicing, including a probe into Nationstar's own loan servicing practices launched by the New York State Department of Financial Services in March 2014, was significantly increasing the Company's costs of servicing MSRs and diminishing the profitability and carrying value of Nationstar's MSR portfolio. Defendants' false and misleading statements and omissions regarding the Company's business, future revenues, operating results and financial prospects issued during the Class Period caused Nationstar common stock to trade at artificially inflated prices of as high as $38 per share.
On November 6, 2014 the Company reported its 3Q 2014 financial results for the period ended September 30, 2014. Nationstar reported a sequential revenue decline, causing the price of its stock to close down below $28 per share. To keep the stock price artificially inflated, defendants claimed the revenue short-fall was short-lived and promised stronger results in 4Q 2014 and FY 2015.
In January 2015, Nationstar was named as a defendant in a federal civil action accusing the Company of racketeering activity and seeking hundreds of millions of dollars in damages on a classwide basis and alleging that the Company essentially paid itself kickbacks through its Solutionstar billings for improper fees.
On March 24, 2015, with the price of Nationstar common stock trading above $31 per share and its 2015 first quarter essentially complete, the Company announced that it was selling 20 million shares of its common stock at $28.49 per share, for proceeds of $575 million, in an underwritten public offering. The market was shocked and the price of Nationstar common stock fell more than $5 per share, more than 16%, to close below $26 per share on March 25, 2015.
On May 5, 2015, before the open of trading, Nationstar reported its 1Q 2015 results, which caused the price of its common stock to plunge by approximately $6.66 per share, or more than 25%, on unusually high trading volume, when the Company disclosed that rather than the EPS of $0.70 on $514 million in revenue the Company had led the market to expect, Nationstar had instead generated a massive net loss of $48.3 million, or ($0.53) per share, as the Company’s revenue tumbled 15% year-over-year to $382 million, reflecting a 49% sequential plunge in quarterly revenue in its servicing segment to $109 million. Much of the loss came from an additional $110 million ($0.77 per share) write-down on the value of the Company’s MSRs.
Following this series of partial disclosures, the price of Nationstar common stock fell, closing at $19.51 per share on May 5, 2015, nearly 50% below its Class Period high.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
CONTACT: Robert S. Willoughby Pomerantz LLP email@example.comNEXT ARTICLE
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