American Home Mortgage Investment Corporation (OTC: AHMIQ) Investor Securities Class Action Lawsuit 07/31/2007

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Company Name(s): 
American Home Mortgage Investment Corp.
Case Name: 
American Home Mortgage Investment Corp. Shareholder Class Action Lawsuit 07/31/2007
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
OTC: AHMIQ
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
07/31/2007
Class Period Begin: 
08/09/2005
Class Period End: 
04/30/2007
Court of Filing: 
U.S. District Court for the Eastern District of New York
Date Settled: 
01/14/2010
Settlement Amount: 
$37,250,000
Deadline to Participate in Settlement: 
03/01/2010
Summary: 

January 14, 2010 - The court approved the settlement, entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and dismissed the action with prejudice.

July 30, 2009 - The court preliminarily approved the settlement.

July 7, 2009 - Parties filed a stipulation of settlement.

June 4, 2008 - The lead plaintiff filed an amended complaint.

March 19, 2008 - The lead plaintiff and lead counsel were appointed and all cases were consolidated into a multi-district case.

November 1, 2007 - Another lead plaintiff motion was filed.

October 1, 2007 - Lead plaintiff motions were filed.

July 31, 2007 - An investor in shares of American Home Mortgage Investment Corporation (OTC: AHMIQ) filed a complaint in the U.S. District Court for the Eastern District of New York against American Home Mortgage Investment Corporation over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between July 26, 2006 and July 27, 2007.

The complaint charges American Home Mortgage Investment Corporation and certain of its officers and directors with violations of the Securities Exchange Act of 1934. According to the complaint, between July 26, 2006 and July 27, 2007, defendants issued materially false and misleading statements that misrepresented and failed to disclose that: (i) American Home Mortgage Investment Corporation was experiencing an increasing level of loan delinquencies which was depressing its earnings; (ii) that American Home Mortgage Investment Corporation was experiencing increasing difficulties in selling its loans and, therefore, was required to decrease prices, thereby reducing margins and profits; and (iii) as a result of the foregoing, American Home Mortgage Investment Corporation was overstating its financial results by failing to write-down the value of certain of the loans in its portfolio as these loans had declined substantially in value.
Then, on June 28, 2007, American Home Mortgage Investment Corporation issued a press release announcing that it will take “substantial charges for credit-related expenses in the second quarter.” American Home Mortgage Investment Corporation reported that the increase in losses was related to its practice of extending a three month timely payment warranty that the company granted to loan buyers who purchased stated income loans. In response to this announcement, the price of American Home Mortgage Investment Corporation stock (OTC: AHMIQ) declined from $20.91 per share to $18.38 per share on extremely heavy trading volume. Then, on July 27, 2007, after the close of the market, American Home Mortgage Investment Corporation issued a press release announcing that its Board of Directors had determined to delay paying its dividend. In response to this announcement, on July 30, 2007, the NYSE halted trading in American Home Mortgage Investment Corporation stock before the market opened

American Home Mortgage Investment Corporation is a real estate investment trust (REIT), which engages in the investment and origination of residential mortgage loans in the United States. The Company primarily originates and sells securitized adjustable-rate mortgage loans, as well as engages in the sale of mortgage loans to institutional investors and servicing mortgage loans owned by others.