CompuCredit Corporation (NASDAQ: CCRT) Investor Securities Class Action Lawsuit 07/14/2008

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Company Name(s): 
CompuCredit Corporation
Case Name: 
CompuCredit Corporation Shareholder Class Action Lawsuit 07/14/2008
Case Status: 
Case Dismissed
Affected Securities
NASDAQ: CCRT
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
07/14/2008
Class Period Begin: 
05/04/2004
Class Period End: 
06/10/2008
Court of Filing: 
U.S. District Court for the Northern District of Georgia
Deadline To File for Lead: 
09/15/2008
Case Dismissed: 
01/13/2010
Summary: 

January 13, 2010 - The court dismissed the case with prejudice.

December 17, 2009 - The court granted the defendant's additional motion to dismiss.

December 4, 2009 - The court granted the defendants' motion to dismiss and granted plaintiff leave to file an amended complaint.

November 2, 2009 - One defendant filed an additional motion to dismiss.

March 18, 2009 - Defendants filed a motion to dismiss.

December 24, 2008 - The lead plaintiff filed an amended consolidated complaint on behalf of investors who purchased NASDAQ: CCRT common shares between May 4, 2004 and June 10, 2008. The lead plaintiff alleges that the defendants violated the Securities Act of 1934 by issuing false and misleading statements between May 4, 2004 and June 10, 2008.

October 22, 2008 - The lead plaintiff and lead counsel were appointed and all cases were consolidated.

September 12, 2008 - Lead plaintiff motion was filed.

August 22, 2008 - Another investor filed a complaint.

July 14, 2008 - An investor in shares of CompuCredit Corporation (now known as Atlanticus Holdings Corporation) (NASDAQ: CCRT now trading on the NASDAQ sheets as ATLC) filed a lawsuit in the U.S. District Court for the Northern District of Georgia against CompuCredit Corporation over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff charges CompuCredit Corporation and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that between November 6, 2006 and June 9, 2008 defendants issued materially false and misleading statements regarding CompuCredit Corporation's business and financial results. As a result of defendants’ false statements, CompuCredit Corporation (NASDAQ: CCRT now trading on the NASDAQ sheets as ATLC) stock traded at inflated prices during the Class Period.

On June 10, 2008, The Wall Street Journal reported that federal regulators were expected to seek more than $100 million in fines and restitution against CompuCredit Corporation related to deceptive credit-card marketing tactics and abusive debt-collection practices. On this news, CompuCredit Corporation's (NASDAQ: CCRT now trading on the NASDAQ sheets as ATLC) stock dropped $2.49 per share to close at $6.30 per share on June 10, 2008, a one-day decline of 28% on extremely high volume.

According to the complaint, facts which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) CompuCredit Corporation's assets contained millions of dollars worth of impaired and risky securities, many of which were backed by loans to subprime borrowers; (b) CompuCredit Corporation was not adequately accounting for its provision for loan losses in violation of Generally Accepted Accounting Principles, causing its financial results to be materially misstated; (c) CompuCredit Corporation's improper marketing and collection practices would lead to large fines and would harm CompuCredit Corporation's future results; (d) CompuCredit Corporation had far greater exposure to anticipated losses and defaults related to its subprime customers than it had previously disclosed; (e) given the deterioration in the market for asset-backed securities related to subprime consumers, CompuCredit Corporation would be forced to reduce its lending operations due to liquidity concerns as it relied upon the sale of its asset-backed securities to fund its ongoing operations; and (f) given the increased volatility in the subprime market and increased level of delinquencies and defaults that CompuCredit Corporation was experiencing, CompuCredit Corporation had no reasonable basis to make projections about its financial results.

CompuCredit Corporation provides credit and related financial services and products to underserved and un-banked consumers.