Bernstein Liebhard LLP Announces That A Class Action Has Been Filed Against Nationstar Mortgage Holdings, Inc.
June 23, 2015
Bernstein Liebhard LLP today announced that a class action has been commenced in the United States District Court for the Southern District of Florida on behalf of shareholders (the “Class”) who purchased shares of Nationstar Mortgage Holdings, Inc. (“Nationstar” or the “Company”) (NYSE: NSM) common stock (the “Class”) between February 27, 2014 and May 4, 2015 (the “Class Period”).
The complaint charges Nationstar and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Nationstar is the nation’s second largest non-bank subprime mortgage servicer. In this capacity, Nationstar collects mortgage premiums and otherwise services mortgages for loans owned by other entities. Nationstar began to grow its portfolio in early 2014 by purchasing mortgage servicing rights (“MSRs”) from other non-bank sub-prime mortgage servicers and from bank entities who no longer wanted to service their own portfolios due to increased regulatory scrutiny.
Nationstar failed to disclose deficiencies in management control and supervision necessary to ensure the Company’s compliance with applicable laws and regulations in connection with the servicing of MSRs, and that Nationstar had been gouging mortgagors and illegally enhancing its profits through illicit practices, such as charging for repeated, unnecessary inspections, which resulted in additional late payment fees, and pressuring mortgagors to carry out expensive modifications and refinances on their mortgages.
The complaint alleges that due to a series of partial disclosures beginning in late 2014, the price of Nationstar common stock began to decline as the truth about the Company was slowly revealed to the market. On November 6, 2014, a report of declining third quarter 2014 financial results was published, followed in January 2015 with Nationstar being named as a defendant in a class action brought in federal court in the Southern District of Florida on behalf of mortgagors alleging racketeering in connection with the collection of unlawful inspection fees. Nationstar’s stock price declined further on a February 26, 2015 report of dismal fourth quarter and fiscal 2014 financial results, and even further when the Company priced a March 25, 2015 equity offering well below market. Finally, on May 5, 2015, Nationstar issued disappointing first quarter 2015 financial results – caused largely by a $110 million ($0.77 per share) write-down on the value of the Company’s MSRs.
Plaintiffs seek to recover damages on behalf of all Class members who invested in Nationstar common stock during the Class Period. If you invested in Nationstar common stock as described above, and lost over $100,000 (whether realized losses or unrealized losses on stock you still hold) on the transactions, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than August 3, 2015.
A “lead plaintiff” is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.
If you are interested in discussing your rights as a Nationstar shareholder and/or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or firstname.lastname@example.org.
Bernstein Liebhard LLP has pursued hundreds of securities, consumer and shareholder rights cases and recovered over $3 billion for its clients. The National Law Journal has recognized Bernstein Liebhard for twelve consecutive years as one of the top plaintiffs’ firms in the country.
You can obtain a copy of the complaint from the clerk of the court for the United States District Court for the Southern District of Florida.