|By PR Newswire||
|March 13, 2014 05:01 PM EDT||
PHILADELPHIA, March 13, 2014 /PRNewswire/ -- Cohen, Placitella & Roth, PC is investigating claims on behalf of investors who purchased Walter Investment Management Corp. common stock ("Walter Investment" or the "Company") (NYSE:WAC) between May 9, 2012 and February 26, 2014, inclusive ("Class Period"). The investigation concerns whether Walter Investment and certain of its officers knowingly or recklessly disseminated material false and/or misleading information to investors in violation of Sections 10(b), and 20(a) of the Securities Exchange Act of 1934.
Walter Investment is a loan servicer and business solutions provider focused on generating recurring, fee-based revenues from an "asset-light" platform. The Company specializes in offering creative, structured solutions to owners of less-than-prime, non-conforming and other credit challenged mortgage assets.
During the Class Period, Defendants issued a series of announcements disclosing material adverse facts about the Company's business, operations and financial reporting, including that: (1) the Company lacked adequate internal controls over financial accounting and compliance with applicable laws; (2) the Company's internal controls were not effective; (3) the Company's financial statements were materially false and misleading; (4) the Company had failed to disclose material weaknesses in the internal controls of Reverse Mortgage Solutions, Inc. ("RMS"), a company acquired during the Class Period; (5) the Company had overstated the value of its RMS acquisition; (6) the Company was in violation of applicable law, rules and regulations; (7) the Company's business practices allegedly violated consumer financial protection laws and jeopardized the Company's revenues and profits were at risk; and, (8) as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times. When these true facts entered the market in a series of partial disclosures, the price of Walter Investment securities dropped, damaging investors.
On March 18, 2013, the Company announced that, based on an evaluation by the Company's Board of Directors and management, it had identified a material weakness in the Company's internal control over financial reporting. As a result, the Company admitted, that as of the end of the period covered by the Annual Report on Form 10-K, the internal control over financial reporting was not effective. Following this news from the Company, shares fell $8.61 per share to close on March 19, 2013 at $32.98 per share, a drop of over 20%, wiping-out over $306 million in shareholder value.
Then on February 27, 2014, the Company announced in a Form 8-K that the Federal Trade Commission ("FTC") issued a Civil Investigative Demand "(CID") to Green Tree Servicing LLC, a wholly owned indirect subsidiary of the Company, requesting information on a broad range of subjects relating to the companies' operations. The Consumer Financial Protection Bureau ("CFPB") had been participating in the FTC's investigation since April 2012. On this news shares of Walter Investment fell from $28.28 per share to $25.90 per share, a drop of more than 8%, on unusually heavy trading volume on February 27, 2014.
If you have any information on the ineffectiveness of the Company's internal control over financial reporting or the FTC and CFPB investigation or you wish to discuss your rights related to a loss in your investment in Walter Investment, please contact Eduardo A. Texidor Jr. at [email protected] or, toll free, at 1-888-375-7600. For those investors inquiring via email, please be sure to include "Walter Investment" in the subject line, the number of shares purchased, and your mailing address and telephone number.
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