Hagens Berman Sobol Shapiro Announces Class Action Lawsuit Against Washington Mutual

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.