Hagens Berman Sobol Shapiro filed
a proposed class-action lawsuit against Washington Mutual (NYSE:WM)
claiming the company violated the Securities Exchange Act of 1934 and
committed securities fraud by artificially inflating the Company’s financial
results through inflation of property appraisals to support risky loans.
"With the mortgage industry having made so
much money in recent years, it is disappointing to hear that these
profits were made by inflating loan appraisals that put both the
shareholders of Washington Mutual and homeowners across the nation at
risk of defaults and foreclosures, while the executives took home
handsome paychecks for what was believed to be a real and legitimate
performance,” said lead attorney and HBSS
partner Reed Kathrein. "We
intend to pursue aggressive legal action to protect the rights
of investors.”
Insight into WaMu’s alleged mortgage loan
mishandlings came in early November when the Attorney General of the
State of New York filed a lawsuit against First American Corporation and
eAppraiseIT, alleging their complicity in a scheme to provide inflated
appraisals to Washington Mutual.
According to the complaint, WaMu told investors in mid-October 2007 that
the company had suffered a 72 percent drop in net income during the
third quarter of 2007 and would have to set aside up to $1.3 billion in
the fourth quarter of 2007 to cover its losses. These write downs were
caused, at least in part, by the impairment of loan assets that were
based on the inflated appraisals fraudulently orchestrated by WaMu and
eAppraiseIT, the complaint alleges.
WaMu’s officers had a duty to the relay
accurate and truthful information regarding the company’s
financial standing, which they failed to do on numerous occasions, and
to correct any previously-issued statements that had become materially
misleading or untrue so the value of company stock would not suffer, the
complaint alleges.
According to the filed complaint these individuals participated in the
drafting, preparation and approval of many public and shareholder
reports and were aware of, or chose to disregard any misstatements.
Washington Mutual is one of the nation’s
largest residential and commercial banks operating in retail banking,
card services, commercial and home loans. The company’s
home loans segment provides a range of services including originating
and servicing home loans, offers real estate secured residential loan
products and services consisting of fixed-rate home loans,
adjustable-rate home loans, hybrid home loans and mortgage loans to
higher risk borrowers.
The lawsuit filed in U.S. District Court in Seattle claims Washington
Mutual, in cooperation with its appraisal firm, violated the Securities
Exchange Act of 1934 and as a result has damaged stock holders and
company investors.
If you purchased WaMu stock from April 18, 2006 until Nov. 1, 2007 and
want to participate as lead plaintiff in this class action you must move
on or before January 4, 2008. Visit www.hbsslaw.com/wamu
or contact HBSS at wamu@hbsslaw.com
or 206-623-7292.
About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro is based in Seattle with offices in Chicago,
Cambridge, Los Angeles, Phoenix and San Francisco. Since 1993, it has
developed a nationally recognized practice in class-action and complex
litigation. Among recent successes, HBSS has negotiated a $300 million
settlement in the DRAM memory antitrust litigation, one of the largest
anti-trust settlements in history; a $340 million recovery on behalf of
Enron employees; a $150 million settlement involving charges of
illegally inflated charges for the drug Lupron, and served as co-counsel
on the Visa/Mastercard litigation which resulted in a $3 billion
settlement, the largest anti-trust settlement to date. HBSS served as
counsel in a $850 million Washington Public Power Supply settlement and
represented Washington and 12 other states against the tobacco industry
that resulted in the largest settlement in history. For a complete
listing of HBSS cases, visit www.hbsslaw.com.
Bookmarken
