LAWFUEL – Legal Newswire – Michael Strauss , the founder and chief executive of American Home Mortgage Investment (AHMIQ) could face insider trading charges, Businessweek reports.
AMH has faced a swarm of problems in recent months. One of the biggest, fastest-growing mortgage lenders in the country, its shares had slipped from a high of $36.40 last December to $10.47 by late July as the housing crisis deepened.
On July 31, things got decidedly worse. After the Melville (N.Y.) company announced that it would delay its dividend amid growing cash woes, panicked investors fled, sending the shares tumbling $1.04 by the end of the day. Six days later, American Home Mortgage filed for bankruptcy in Delaware (see BusinessWeek.com, 7/30/07, “American Home’s Credit Crisis”).
Now, could Strauss potentially face civil insider trading charges as well?
On Aug. 1, with the stock trading at $1.17, Strauss sold 2.97 million shares worth $3.5 million, according to filings with the Securities & Exchange Commission. With American Home’s bankruptcy filing on Aug. 6, those shares—along with another 1.57 million shares Strauss did not sell—became virtually worthless.List your legal jobs on the LawFuel Network