HARTFORD, Conn., Nov. 6, 2007 (PRIME NEWSWIRE) -- The law firm of Schatz Nobel Izard P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of all persons who purchased the common stock of Washington Mutual, Inc. ("Washington Mutual" or the "Company") (NYSE:WM) between October 18, 2006 to November 1, 2007.
The Complaint charges that Washington Mutual and certain of its officers and directors violated federal securities laws by issuing materially false statements regarding the Company's business and financial results. Specifically, the Company failed to disclose: (i) that it had far greater exposure to anticipated losses and defaults in its home loan portfolio, particularly with Option-ARMs, than it had previously disclosed; (ii) that defendants' statements that they were implementing defensive measures to weather the increasingly difficult credit and housing markets were false; (iii) that defendants had engaged in a conspiracy to inflate the appraisal value of homes with the intent to artificially increase the estimated loan-to-value ratio of its Option-ARM portfolio; and (iv) that due to the Company's improper appraisal practices, the mortgages it had issued were much riskier than represented.
October 17, 2007 Washington Mutual disclosed that it had suffered a 72% drop in third quarter of 2007 net income and would have to set aside up to $1.3 billion in the fourth quarter of 2007 to cover its loan losses. Then, on November 1, 2007, New York's Attorney General issued a press release announcing that a lawsuit was filed against First American Corporation and eAppraiseIT, alleging that they conspired with Washington Mutual to inflate Real Estate appraisals. Following this disclosure, Washington Mutual's stock fell to a close of $23.81 per share.
If you are a member of the class, you may, no later than January 4, 2008, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz Nobel Izard P.C. has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz Nobel Izard P.C. toll-free at (800) 797-5499, or by e-mail at firm@snilaw.com, or visit our website: www.snilaw.com.