PHILADELPHIA, April 7, 2008 (PRIME NEWSWIRE) -- The law firm of Spector Roseman & Kodroff, P.C. announces that a class action lawsuit was commenced in the United States District Court for the Northern District of California, on behalf of purchasers of the securities of The PMI Group, Inc. ("PMI" or the "Company") (NYSE:PMI) from November 2, 2006 through March 3, 2008, inclusive (the "Class Period").
The complaint charges PMI and certain of its officers and directors with violations of the Securities Exchange Act of 1934. PMI, through its subsidiaries, provides credit enhancement products designed to promote homeownership and facilitate mortgage transactions in the capital markets in the United States, Australia, New Zealand and the European Union.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. As a result of defendants' false statements, PMI stock traded at artificially inflated prices during the Class Period, reaching its Class Period high of $50.21 per share in February 2007. Then, on March 3, 2008, after the market closed, PMI announced its preliminary fourth quarter 2007 financial results and that it would be delayed in filing its Form 10-K for year-end 2007 because it was awaiting financial information from an equity investee, FGIC Corporation ("FGIC"), that was necessary for the Company to complete its financial statements. On this news, PMI's stock collapsed to $6.43 per share on March 4, 2008, a one-day decline of 5% and an 87% decline from its Class Period high in February 2007.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company's investment in FGIC was materially impaired as FGIC's bond insurance arm, Financial Guaranty, had significant exposure to defaults on bonds it insured due to the plunge in value of mortgage debt; (b) the Company was materially overstating its financial results by failing to properly value its investment in FGIC and by failing to write down that investment in a timely fashion in violation of Generally Accepted Accounting Principles ("GAAP"); (c) the Company was not adequately accounting for its loss reserves in violation of GAAP, causing its financial results to be materially misstated; (d) the Company failed to engage in proper underwriting practices for its book of business related to insurance written in 2005 through most of 2007; (e) the Company had far greater exposure to anticipated losses and defaults related to its book of business related to insurance written in 2005 through most of 2007 than it had previously disclosed; (f) given the deterioration and the increased volatility in the subprime market, the Company would be forced to tighten its standards and stop writing insurance policies to certain categories of borrowers which would have a direct material negative impact on its book of business going forward; and (g) given the increased volatility in the subprime market, the Company had no reasonable basis to make projections about its incurred losses or about its new insurance written. Plaintiff seeks to recover damages on behalf of all purchasers of PMI common stock during the Class Period (the "Class").
If you purchased PMI securities during the Class Period, you may, no later than May 12, 2008, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, which acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth.
If you have sustained substantial losses in PMI securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to join this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or e-mail at classaction@srk-law.com. For more detailed information about the firm, please visit its website at http://www.srk-law.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered through judgments and settlements on behalf of thousands of defrauded shareholders and companies.
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