COLCHESTER, Conn., Sept. 15, 2007 LAWFUEL – The Legal Newswire — On September 15, 2007, Scott+Scott, LLP, filed a class action against RAIT Financial Trust (f/k/a RAIT Investment Trust) (“RAIT” or the “Company”)
(NYSE:RAS) and certain officers and directors in the U.S. District Court for the Eastern District of Pennsylvania. The action is on behalf of RAIT common stock purchasers during the period January 10, 2007 through July 31, 2007, inclusive (the “Class Period”), for violations of the Securities Exchange Act of 1934. The complaint alleges that defendants made false and misleading statements and material omissions regarding the Company’s business and operations and that, as a result, the price of the Company’s securities was inflated during the Class Period, thereby harming investors.
If you purchased RAIT stock during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than October 1, 2007. Any member of the investor class may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott (scottlaw@scott-scott.com, 800/404-7770, 860/537-5537) or visit the Scott+Scott website, http://www.scott-scott.com, for more information. There is no cost or fee to you.
According to the complaint, during the Class Period, defendants made false and misleading statements and omissions regarding the Company’s exposure to risky mortgage-backed debt instruments. Unbeknownst to the investment community, the Company’s public disclosures served to actively conceal materially false and misleading statements which misrepresented and otherwise failed to disclose (i) the financial relationship between RAIT and its trust preferred securities (“TruPS”) issuer American Home Mortgage Investment Corp. (NYSE:AHM); (ii) despite the Company’s representations to the contrary, the likelihood of non-payment on the TruPS issued by AHM had significantly increased as of AHM’s withdrawal of guidance on June 28, 2007; and (iii) RAIT failed to insure or otherwise maintain adequate reserves to cover the risk of non-payment by issuers of TruPS, particularly for the loss of $95 million in value of TruPS issued by AHM.
Then, on July 31, 2007, the Company announced shocking news that the asset portfolio of RAIT was seriously impaired, by as much as $95 million, resulting from trust preferred financing provided to AHM in 2005. As a direct result, the price of RAIT stock plummeted, losing over $5.72 or 36%, closing $10.36 per share, on volume of over 21.9 million shares.
The plaintiff is represented by Scott+Scott, a firm with significant experience in prosecuting investor class actions. Please visit our website at www.scott-scott.com for current information on the litigation of major securities, antitrust, employment and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca
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CONTACT: Scott+Scott, LLP
(800) 404-7770
(860) 537-5537
scottlaw@scott-scott.com
