NEW YORK, Aug. 14 LAWFUEL – Litigation News Release Service — Wolf Haldenstein Adler Freeman & Herz LLP filed today a class action lawsuit in the United States District Court, Southern District of New York, on behalf of all persons who purchased the common stock of Scottish Re Group Ltd. (“Scottish Re” or the “Company”)
(NYSE: SCT) between February 17, 2005 and July 28, 2006, inclusive (the
“Class Period”), against defendants Scottish Re, and certain of its
officers and directors, including Glenn S. Schafer, Scott E. Willkomm, Paul
Goldean, Elizabeth A. Murphy, Dean E. Miller and Seth Vance, alleging
violations under the Securities Exchange Act of 1934, 15 U.S.C. Section
78(i)(b), 78(t) and 78t-1(a) and Rule 10b-5, promulgated thereunder, 17
C.F.R. Section 240.10b-5 (the “Class”). Mr. Willkomm resigned as CEO on
July 31, 2006.
The Complaint alleges that throughout the Class Period, Defendants made false and misleading statements and omissions concerning Scottish Re’s financial health and business prospects. Defendants also engaged in a
concerted scheme to cover up serious operational and financial problems.
In February 2006, the Company reported strong earnings for the 2005 fourth
quarter, and stated that this positive momentum would continue going
forward. In early May 2006, Scottish Re announced that it had refinanced,
at favorable rates, all of its regulatory reserves for the business
acquired in its acquisition of ING Re, Scottish Re’s reinsurance business.
The Company then reported reduced earnings for the first quarter of 2006,
but dismissed it as temporary, and certainly not a cause for major concern.
However, on July 31, 2006, before the market opened, Defendants shocked investors with news that: (1) the Company’s CEO, Defendant Scott Willkomm, had resigned his position; (2) that for the second quarter ended June 30, 2006, contrary to the Company’s earlier positive guidance, Scottish Re
expected to report a net operating loss of an astounding $130 million, of
which $112 million was due to the valuation of allowances on deferred tax
assets; (3) that the Company would suspend its ordinary share dividend; (4) that the Company had engaged Goldman Sachs and Bear Stearns to assist
Scottish Re with evaluating strategic alternatives and potential sources of capital; and (5) that results for the remainder of the year would be
negatively affected.
On this news the Company’s share prices plummeted from $16.00 to $3.99, a 75% decline, on unusually heavy trading volume.
As a result of the dissemination of the false and misleading statements set forth above, the market price of Scottish Re common stock was artificially inflated during the Class Period. In ignorance of the false
and misleading nature of the statements described above, and the deceptive and manipulative devices and contrivances employed by said defendants, plaintiffs and the other members of the Class relied, to their detriment,
on the integrity of the market price of the stock in purchasing Scottish Re common stock. Had plaintiffs and the other members of the Class known the truth, they would not have purchased said shares, or would not have
purchased them at the inflated prices that were paid.
The case name is styled Hickock v. Scottish Re Group Ltd., et al. A
copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at http://www.whafh.com.
If you purchased Scottish Re common stock during the Class Period, you may request that the Court appoint you as lead plaintiff by October 2, 2006.
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 Wolf Haldenstein, or other counsel of your choice, to serve as your counsel in this action.
Wolf Haldenstein has extensive experience in the prosecution of
securities class actions and derivative litigation in state and federal
trial and appellate courts across the country. The firm has approximately
60 attorneys in various practice areas; and offices in Chicago, New York
City, San Diego, Washington D.C., and West Palm Beach. The reputation and
expertise of this firm in shareholder and other class litigation has been
repeatedly recognized by the courts, which have appointed it to major
positions in complex securities multi-district and consolidated litigation.
If you wish to discuss this action or have any questions, please
contact Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue,
New York, New York 10016, by telephone at (800) 575-0735 (Gregory M.
Nespole, Esq., Paulette S. Fox, Esq., or Derek Behnke), via e-mail at
classmember@whafh.com or visit our website at http://www.whafh.com. All
e-mail correspondence should make reference to Scottish Re.
