NEW YORK, Oct. 19, 2014 (GLOBE NEWSWIRE) -- Pomerantz LLP has filed a class action lawsuit against Flagstar Bancorp, Inc. ("Flagstar" or the "Company") (NYSE:FBC) and certain of its officers. The class action, filed in United States District Court, Eastern District of Michigan, and docketed under 14-cv-13459, is on behalf of a class consisting of all persons or entities who purchased Flagstar securities between January 22, 2014 and August 26, 2014, inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased Flagstar securities during the Class Period, you have until November 4, 2014 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Flagstar is the holding company for Flagstar Bank, FSB ("Flagstar Bank"). Flagstar Bank accepts deposits from the general public and originates or acquires residential mortgage loans. Flagstar Bank also originates consumer, commercial real estate, and non-real estate commercial loans and it operates predominantly in Michigan and Indiana, as well as throughout the United States.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, and failed to disclose material adverse facts about the Company's business, operations, prospects, performance, and compliance with federal law. Specifically, during the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (i) dating back to 2011, the Company's loss mitigation practices and default servicing operations were not in compliance with various federal consumer financial laws promulgated by the Consumer Financial Protection Bureau ("CFPB"); (ii) the Company lacked proper internal controls; and (iii) as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On August 26, 2014, the Company filed a Form 8-K with the Securities and Exchange Commission ("SEC"), announcing that it has begun settlement discussions with the CFPB over alleged violations of consumer finance laws dating back to 2011.
As a result of these allegations, Mark Palmer, an analyst at BTIG investment bank, downgraded its rating on Flagstar to sell, noting that the "allegations raise questions regarding servicing operations amid uncertainty of potential rebound of its mortgage business."
On this news, Flagstar stock fell $0.83, or almost 4.5%, on unusually heavy trading volume, to close at $17.66 on August 27, 2014.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.