NEW YORK, Aug. 13, 2007 LAWFUEL – Class Actions News — Harwood Feffer LLP has filed a lawsuit in the United States District Court for the Eastern District of New York on behalf of its client and on behalf of all persons who purchased the common stock of American Home Mortgage Investment Corp. (“AHM” or the “Company”) (NYSE:AHM) between July 26,
2006 through July 27, 2007, both dates inclusive (the “Class Period”).
Also included are those who purchased the shares of AHM in the Secondary Offering on April 30, 2007.
The Complaint, a copy of which can be obtained from the Court or can be viewed on Harwood Feffer web site at www.hfesq.com, charges Michael Strauss, the Chief Executive Officer of AHM, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. It is alleged that Defendant Strauss and the Company omitted or misrepresented material adverse facts about the Company’s financial condition, business prospects, and revenue expectations during the Class Period.
Specifically, the Complaint alleges that, during the Class Period, Defendant Strauss and the Company issued numerous materially false and misleading statements which caused AHM’s securities to trade at artificially inflated prices. As alleged in the Complaint, these statements were materially false and misleading because they misrepresented and failed to disclose that: (1) the Company was experiencing an increasing level of loan delinquencies which was depressing its earnings; (2) the Company was experiencing increasing difficulties in selling its loans and, therefore, was required to decrease prices, thereby reducing margins and profits; and (3) as a result of the foregoing, the Company was overstating its financial results by failing to write-down the value of certain loans in its portfolio as these loans had declined substantially in value.
According to the Complaint, on June 27, 2007, after the market closed, AHM issued a press release announcing that it will take “substantial charges for credit-related expenses in the second quarter.” The Company reported that the increase in losses was related to its practice of extending a three month timely payment warranty that the Company granted to loan buyers who purchased stated income loans. In response to this announcement, the price of AHM stock declined from $20.91 per share to $18.38 per share on extremely heavy trading volume. Then, on July 27, 2007, after the close of the market, AHM issued a press release announcing that its Board of Directors had determined to delay paying its dividend. On the next trading day, July 30, 2007, before the marked opened, the NYSE halted trading in AHM stock. In response to these events and announcements, the Company’s stock declined from
$10.47 on July 30, 2007 to close at $1.04 on July 31, 2007 on unusually high trading volume. On August 6, 2007, the Company filed for bankruptcy protection in the United States Bankruptcy Court for the District of Delaware under Chapter 11 of the United States Bankruptcy Code.
If you are a member of the class described above, you may, not later than October 1, 2007, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation.
In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class.
Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Harwood Feffer, or other counsel of your choice, to serve as your counsel in this action.
Harwood Feffer has taken a leading role in many important actions on behalf of defrauded shareholders, employee investors and consumers and is responsible for hundreds of millions of dollars in recoveries. The Harwood Feffer website (www.hfesq.com) contains detailed information regarding this matter and additional information about the firm.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca