Shareholder Class Action Filed Against the PMI Group, Inc. by the Law Firm of Schiffrin Barroway Topaz & Kessler, LLP
RADNOR, Pa., April 3, 2008 /PRNewswire/ -- The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Northern District of California, on behalf of all purchasers of securities of The PMI Group, Inc. (NYSE:PMI) ("PMI" or the "Company") between November 2, 2006 and March 3, 2008, inclusive (the "Class Period"). If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbtklaw.com.
The Complaint charges PMI and certain of its officers and directors with violations of the Securities Exchange Act of 1934. PMI provides credit, capital, and risk transfer services. Through its wholly and partially owned subsidiaries, PMI offers residential mortgage insurance and credit enhancement products, financial guaranty insurance, and financial guaranty reinsurance. One such entity that PMI has an equity stake in is Financial Guaranty Insurance Company ("FGIC"), which is an insurance holding company whose wholly owned subsidiary, Financial Guaranty Insurance Corporation, provides credit enhancement on infrastructure finance and structured finance securities worldwide. The Complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company's financial well-being, business relationships, and prospects. Specifically, defendants failed to disclose or indicate the following: (1) that FGIC had exposure to defaults on mortgage-backed securities and was materially impaired as a result; (2) that the Company failed to properly account for its investment in FGIC and in doing so overstated its financial results; (3) that the Company engaged in improper underwriting practices in its book of business related to insurance; (4) that the Company had far greater exposure to defaults and losses in regard to its book of business related to insurance than it disclosed; (5) that the Company would have to stop writing insurance policies to borrowers, which would have a negative result on future business; (6) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (7) that the Company lacked adequate internal and financial controls; and (8) that, as a result of the foregoing, the Company's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made. Beginning in July 2007 and continuing through the end of the Class Period, the Company began to issue a series of disclosures, where it acknowledged its exposure to anticipated losses and defaults related to the housing and credit crisis. According to PMI, those losses and defaults were caused by the Company's failure to engage in proper underwriting practices. Additionally, PMI announced losses that were related to large increases in defaults and its investment in FGIC. At the same time, ratings agencies such as Fitch Ratings downgraded the Company's stock. By October 2007, Standard & Poor's announced that it placed PMI on negative CreditWatch with negative implications. Throughout this time, the Company continued to make denials and misrepresentations about the true nature of its finances and prospects, even as the artificially inflated price of its stock began a slow but steady decline. On March 3, 2008, the Company shocked investors when it announced that its 2007 Annual Report would be filed late, and that the Company's U.S. Mortgage Insurance Operations had reported a net loss of $236 million in the fourth quarter. The Company's quarterly loss was the result of an increase in default inventory, higher claim rates and higher average claim sizes. Additionally, the Company reported that its Federal Guarantee segment would report a significant net loss for the fourth quarter and full year 2007, driven by equity losses of FGIC, which resulted from unrealized mark-to-market losses and loss adjustment expenses at FGIC. The Company further disclosed that it was still trying to determine whether the value of its investment in FGIC was impaired as of December 31, 2007. That same day, the Company filed a Form 12b-25 with the SEC, wherein it revealed that it was unable to file its Annual Report for 2007 on time. Upon the release of this news, the Company's shares declined $0.35 per share, or 5.16 percent, to close on March 4, 2008 at $6.43 per share, on unusually heavy trading volume. During the Class Period, the Company's shares closed as high as $50.07 per share. Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler which prosecutes class actions in both state and federal courts throughout the country. Schiffrin Barroway Topaz & Kessler is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. For more information about Schiffrin Barroway Topaz & Kessler or to sign up to participate in this action online, please visit www.sbtklaw.com If you are a member of the class described above, you may, not later than May 12, 2008, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. CONTACT: Schiffrin Barroway Topaz & Kessler, LLP First Call Analyst:
CONTACT: Darren J. Check, Esq. or Richard A. Maniskas, Esq., both of Web site: http://www.sbtklaw.com/
2008-04-03 18:27:07 0328067 PRNEWSWIRE
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