Home Loan Servicing Solutions Ltd (NASDAQ: HLSS) Investor Securities Class Action Lawsuit 01/29/2015

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Company Name(s): 
Home Loan Servicing Solutions
Case Name: 
Home Loan Servicing Solutions Shareholders Class Action Lawsuit 01/29/2015
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: HLSS
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
01/29/2015
Class Period Begin: 
02/28/2012
Class Period End: 
01/22/2015
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
03/30/2015
Date Settled: 
06/15/2017
Settlement Amount: 
$6,000,000
Deadline to Participate in Settlement: 
10/31/2017
Summary: 

June 15, 2017 - The court preliminarily approved the settlement.

June 9, 2017 - Parties filed a stipulation of settlement.

February 11, 2016 - Defendants filed motions to dismiss.

January 27, 2016 - The case was transferred to the U.S. District Court for the Southern District of Florida.

November 9, 2015 - The lead plaintiffs filed an amended consolidated complaint on behalf of investors who purchased Home Loan Servicing Solutions Ltd (NASDAQ: HLSS) common shares between February 28, 2012 and January 22, 2015. The lead plaintiffs allege that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between February 28, 2012 and January 22, 2015.

April 28, 2015 - Lead plaintiffs and lead counsel were appointed and all cases were consolidated.

January 29, 2015 - An investor in shares of Home Loan Servicing Solutions Ltd (NASDAQ: HLSS) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Home Loan Servicing Solutions Ltd in connection with certain allegedly false and misleading statements made between February 7, 2013 and January 23, 2015.

Home Loan Servicing Solutions Ltd is a development-stage company that was formed to acquire mortgage servicing assets consisting of mortgage servicing rights, rights to fees and other income from servicing mortgage loans, and associated servicing advances.

According to the complaint the plaintiff alleges on behalf of purchasers of Home Loan Servicing Solutions Ltd (NASDAQ: HLSS) common shares between February 7, 2013 and January 23, 2015, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that Home Loan Servicing Solutions Ltd made allegedly false and/or misleading statements and/or allegedly failed to disclose that Home Loan Servicing Solutions Ltd’s business was dependent on Ocwen Financial Corp and Ocwen Financial Corp conducting its business legally, that Home Loan Servicing Solutions Ltd's business faced material risks and uncertainties due to the systemic internal control weaknesses at Ocwen Financial Corp, that Ocwen Financial Corp was under investigation for violating applicable federal and state regulations and laws, including among other things, the New York Department of Financial Services' and the state of California's investigation of Ocwen Financial Corp, that Home Loan Servicing Solutions Ltd was in breach of provisions of its notes held by BlueMountain Capital Management, LLC, and that Home Loan Servicing Solutions Ltd faced material risks if it defaults on its notes.

Home Loan Servicing Solutions Ltd engaged Ocwen Financial Corp, a residential mortgage loan servicer, to service the mortgage loans underlying Home Loan Servicing Solutions Ltd Mortgage Servicing Assets.

Shares of Home Loan Servicing Solutions Ltd (NASDAQ: HLSS) grew from $13.26 per share in June 2012 to as high as $25.24 per share in July 2013.

Home Loan Servicing Solutions Ltd reported that its annual Total Revenue rose from $49.87 million in 2012 to $239.83 million in 2013 and that its Net Income increased from $19.62 million in 2012 to $117.66 million in 2013.

On August 4, 2014, the New York's Department of Financial Services disclosed that it was investigating whether Ocwen Financial Corp entered into improper transactions with affiliated entities.

On December 22, 2014, Home Loan Servicing Solutions Ltd announced that William C. Erbey will be stepping down as non-executive Chairman of the Board of Directors of the Company effective January 16, 2015. Mr. Erbey also stepped down from his post as executive chairman of Ocwen Financial Corporation.

On January 23, 2015, a news outlet reported that BlueMountain Capital Management, LLC delivered a notice of default against Home Loan Servicing Solutions Ltd Servicer Advance Receivables Trust on notes issued by the Trust and owned by BlueMountain. In its notice of default, BlueMountain reportedly cited to Ocwen Finanical’s regulatory problems, among other recent actions, which “materially increase the risk of loss on the Notes that are collateralized by receivables affected by Ocwen’s standing as a servicer.”

Shares of Home Loan Servicing Solutions Ltd (NASDAQ: HLSS) declined to as low as $12.14 per share on January 29, 2015.