Walter Investment Management Corp (NYSE: WAC) Investor Securities Class Action Lawsuit 03/07/2014

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Company Name(s): 
Walter Investment
Case Name: 
Walter Investment Shareholder Class Action Lawsuit 03/07/2014
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NYSE: WAC
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
03/07/2014
Class Period Begin: 
05/09/2012
Class Period End: 
02/26/2015
Court of Filing: 
U.S. District Court for the Middle District of Florida
Deadline To File for Lead: 
05/06/2014
Date Settled: 
06/13/2016
Settlement Amount: 
$24,000,000
Deadline to Participate in Settlement: 
09/01/2016
Summary: 

June 13, 2016 - The court preliminarily approved the settlement.

May 20, 2016 - Parties filed a stipulation of settlement.

July 10, 2015 - The lead plaintiffs filed a third amended complaint.

January 23, 2015 - Defendants filed a motion to dismiss.

January 6, 2015 - The lead plaintiffs filed a second amended complaint.

August 11, 2014 - Defendants filed a motion to dismiss.

July 7, 2014 - The lead plaintiffs filed an amended complaint and one of the lead plaintiffs filed a notice of voluntary dismissal without prejudice.

May 8, 2014 - Lead plaintiffs and lead counsel were appointed.

May 6, 2014 - Lead plaintiff motion was filed.

March 7, 2014 - An investor in shares of Walter Investment Management Corp (NYSE: WAC) filed a lawsuit in the U.S. District Court for the Middle District of Florida against Walter Investment Management Corp over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between May 9, 2012 and February 26, 2014.

According to the complaint the plaintiff alleges on behalf of all persons or entities who purchased or otherwise acquired securities of Walter Investment Management Corp (NYSE: WAC) between May 9, 2012 and February 26, 2014, that Walter Investment Management Corp and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

More specifically, the plaintiff claims that defendants made allegedly false and/or misleading statements and/or failed to disclose that Walter Investment Management Corp lacked adequate internal controls over financial accounting and compliance with applicable laws, that Walter Investment Management Corp's internal controls were not effective, that Walter Investment Management Corp’s financial statements contained false and misleading statements, that Walter Investment Management Corp had failed to disclose material weaknesses in the internal controls of its recently acquired subsidiary, RMS, that Walter Investment Management Corp had overstated the value of its RMS acquisition, that Walter Investment Management Corp was in violation of applicable laws, rules and regulations, that Walter Investment Management Corp’s business practices violated consumer financial protection laws, thereby jeopardizing future revenues and profits, and that as a result of the foregoing, Walter Investment Management Corp’s statements were materially false and misleading at all relevant times.

Walter Investment Management Corp reported that its annual Total Revenue rose from $40.247 million in 2011 to $666.99 million in 2012 and that its Net Loss declined from $66.40 million in 2011 to $22.13 million in 2012. Shares of Walter Investment Management Corp (NYSE: WAC) rose from $18.34 per share in May 2012 to as high as $48.81 per share in February 2013.

On March 18, 2013, Walter Investment Management Corp disclosed that, based on an evaluation by Walter Investment Management Corp's Board of Directors and management, "our management, including our Chief Executive Officer and our Chief Financial Officer, has identified a material weakness in our internal control over financial reporting. As a result of this material weakness, management has concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our internal control over financial reporting was not effective."

On February 27, 2014, Walter Investment Management Corp disclosed in filing with the SEC that In November 2010, the Federal Trade Commission (“FTC”) issued a Civil Investigation Demand (“CID”) to an unknown number of mortgage servicers, including Green Tree Servicing LLC (“Green Tree”), a wholly owned indirect subsidiary of Walter Investment Management, requesting information on a broad range of subjects relating to the companies’ operations. In November 2011, Green Tree received a Supplementary Discovery Request from the FTC seeking additional information. The Consumer Financial Protection Bureau (“CFPB”) began participating in the FTC’s investigation in April 2012. In September 2012, the CFPB issued CIDs to a number of mortgage servicers, including Green Tree, requesting information on a broad range of subjects relating to the companies’ mortgage servicing operations.

Walter Investment Management Corp said that on October 7, 2013, the CFPB notified Green Tree, that the CFPB’s staff is considering recommending that the CFPB take action against Green Tree for alleged violations of various federal consumer financial laws and that on February 20, 2014, the FTC and CFPB staff advised Green Tree that it has sought authority to bring an enforcement action and negotiate a resolution related to alleged violations of various federal consumer financial laws.

Shares of Walter Investment Management Corp (NYSE: WAC) declined to $25.55 per share on February 28, 2014, which is significantly below its current 52 week High of $48.23 per share.