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In Re Downey Securities Litigation
USDC CD California
Mortgage Lending
Background
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 Company
background
Litigation
background
- In Re Downey Securities Litigation
- USDC CD California (Los Angeles)
2:08-cv-03261-JFW-RZ
- Judge John F. Walter
- Filed 5.16.08
Lead
plaintiffs
- Waterford Township General Employees Retirement
System
SEC
disclosures
- Form 10-Q 8.11.08 At page
67
Two purported shareholder class actions, one brought on behalf of Waterford
Township General Employees Retirement System, Case No. CV-08-03261, and the
other brought on behalf of Stephen J. Mihalacki, Case No. SACV08-00609, were
filed on May 16, 2008 and June 2, 2008, respectively, in the United States
District Court for the Central District of California against the Holding
Company and certain of its current and former officers and certain former
directors. The complaints, filed on behalf of all persons who purchased Holding
Company common stock during October 16, 2006 to March 14, 2008, seek unspecified
damages for alleged violation of federal securities laws, claiming that the
defendants made misleading statements and omissions regarding Downeys business
and financial results, thereby artificially inflating the common stock price.
Specifically, the plaintiffs contend that the defendants concealed that (a) the
Banks portfolio of option ARMs contained millions of dollars worth of impaired
and risky securities; (b) the Bank had been aggressive in acquiring loans from
mortgage brokers that were highly risky; (c) the Bank had failed to properly
account for highly leveraged loans; (d) the Bank had inadequate underwriting
practices, which led to large numbers of loan defaults; and (e) the Bank had not
adequately reserved for option ARM loans. A motion to consolidate the two
actions is pending, after which it is expected that the plaintiffs will file a
consolidated complaint.
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Claims
SEC_CODE_REF_0090001192884
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Complaint
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Lead Plaintiff and Counsel Appointed
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Motion
to consolidate
Rulings
- Consolidates actions
- Appoints Waterford as lead plaintiff
- Appoints Coughlin Stoia as lead counsel
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Counsel
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Lead
plaintiff
- Coughlin Stoia
Filed initial complaint
- Brodsky and Smith
Filed another complaint in USDC CD California
Defense
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Related Topics
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