CASES
IndyMac Bancorp, Inc.
Class Period: Aug 17, 2007 to May 11, 2008
Lead Plaintiff Deadline: Aug 11, 2008 + Deadline passed
Summary of Case:
Scott + Scott, LLP has filed a securities class action against IndyMac Bancorp, Inc. (NYSE: IMB) ("IndyMac" or the "Company") on behalf of all purchasers of common stock from August 17, 2007 through May 11, 2008 (Class Period) in the United States District Court for the Central District of California. The deadline to file for lead plaintiff is August 11, 2008.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding IndyMac's business and financial results. Specifically, defendants downplayed and concealed IndyMac's growing exposure to non-performing assets, particularly loans in its pay-option adjustable-rate mortgage ("Option ARM") and homebuilder construction portfolios, and made numerous positive representations regarding the Company's capital position to alleviate investors' fears concerning the Company's capital erosion. As a result of defendants' false statements, IndyMac stock traded at artificially inflated prices during the Class Period, reaching a Class Period high of $24.55 per share in October 2007. Then on May 12, 2008, IndyMac announced its first quarter 2008 financial results, including a net loss of $184.2 million, or ($2.27) per share, compared with net earnings of $52.4 million, or $0.70 per share, in the first quarter of 2007. On this news, IndyMac's stock dropped to close at $2.32 per share - a two-day decline of $1.11 per share, or 32%, and a decline of 91% from $24.55 per share on October 2, 2007.
The true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company was not adequately reserving for its losses on mortgage-related assets in violation of generally accepted accounting principles; (b) the Company had far greater exposure to anticipated losses and defaults concerning its book of business related to its homebuilder and Option ARM portfolios than it had previously disclosed; (c) the Company's capital base was not adequate enough to withstand the significant deterioration in the credit and real estate markets and could jeopardize the Company's status as "well capitalized"; (d) IndyMac had not adequately reserved for Option ARMs; and (e) given the Company's exposure to the increased volatility in the credit and real estate markets, the Company had no reasonable basis to make projections about its earnings.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.