COLCHESTER, Conn., May 11, 2005 (PRIMEZONE) -- Scott + Scott, LLC announced that it filed a shareholder class action lawsuit by request and on behalf of purchasers of Friedman, Billings, Ramsay Group, Inc. (NYSE:FBR) securities from January 29, 2003 and April 25, 2005. You can reach attorney Neil Rothstein at nrothstein@scott-scott.com, 800/332-2259 or 619/233-4565 (or by cell if necessary at 619/251-0887). You can also contact attorney Amy K. Saba at asaba@scott-scott.com . Scott + Scott has offices in Connecticut, Ohio and California. The firm (http://www.scott-scott.com) specializes in complex litigation including securities fraud and represents foundations, individuals, corporations and pension funds worldwide. Shareholders or other interested individuals may contact the firm.
This is a class action on behalf of purchasers of the common stock (other securities investors may contact the firm as well) of Friedman, Billings, Ramsey Group, Inc. ("FBR" or the "Company") between January 29, 2003 and April 25, 2005, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). FBR is an investment bank that provides investment banking, institutional brokerage and asset management services, and invests as principal in mortgage-backed securities ("MBS") and merchant banking investments. In March 2003, the Company was formed through the merger of two existing companies, both engaged in related business and both managed by the FBR management team.
On November 9, 2004, FBR filed its third quarter 2004 Form 10-Q in which it disclosed SEC and NASD investigations:
Friedman, Billings, Ramsey & Co., Inc. ("FBR & Co") is
involved in investigations by the SEC and the NASD concerning
its role in 2001 as a placement agent for an issuer in a PIPE
(private investment in public equity) transaction. The Company has
cooperated fully with the investigations. To date, neither the SEC
nor the NASD has initiated proceeding against the Company or its
employees in connection with the investigations.
In addition, one of the Company's investment adviser
subsidiaries, Money Management Associates, Inc. ("MMA") and one
of its now closed mutual funds, are involved in an investigation
by the SEC with regard to certain losses sustained by the fund in
2003. The Company has cooperated fully with the investigation. To
date, the SEC has not initiated proceedings against the Company or
its employees in connection with the investigation.
Since no proceedings have been initiated in these
investigations, it is inherently difficult to predict the outcome
of the investigations or their affect on FBR & Co., MMA or the
Company. Either or both agencies may initiate proceeding as a result
of the investigations and such proceedings could result in adverse
judgments, injunctions, fines, penalties or other relief against the
company or one or more of its employees.
On this news, FBR's stock dropped to $16.93 per share, some 40%
lower than the Class Period high of $28.70 per share. However, the
market was not apprised as to the seriousness of the investigation,
nor that FBR's earnings were not sustainable. On April 4, 2005,
Emanuel J. Friedman, the CEO, resigned. Then, on April 25, 2005,
after the market closed, FBR announced disappointing preliminary
results for the first quarter 2005, including a charge for its
liability in the PIPE transaction. On this news, FBR's stock dropped
to $12.52 on volume of 7.5 million shares.
TheStreet.com reported on May 5, 2005 that the SEC/NASD investigation included allegations of insider trading.
The true facts, as alleged, which were known to each of the defendants during the Class Period but were concealed from FBR's shareholders, include: The 2001 PIPE transaction manipulation was extremely serious and reached the highest level of the Company; FBR's earnings would be adversely affected by charges related to the investigation into the PIPE transaction and due to the problems the bad publicity would cause FBR; and FBR's 2005 EPS would be much worse than market expectations due to the PIPE transaction as well as due to interest rate increases which would have a much more severe impact on FBR's business than defendants had represented to the market.
Defendants include FBR, an investment bank with its investment banking business based in New York, New York, that provides institutional brokerage, investment banking and asset management services, and invests as principal in MBS and merchant banking investments; Defendant Eric F. Billings ("Billings") who was, at all relevant times, Co-Chief Executive Officer and Co-Chairman of FBR; Defendant Emanuel J. Friedman ("Friedman") who was, at all relevant times, Co-Chairman and Co-Chief Executive Officer of FBR; and Defendant Kurt R. Harrington ("Harrington") who was, at all relevant times, CFO of FBR.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from the date of this notice. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Scott + Scott, LLC. You can receive a copy of the complaint as filed by contacting the firm or the Court. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. This case was filed in the United States District Court for the Southern District of New York and assigned case number 05-cv-4617.
Scott + Scott, LLC as a lead counsel recently settled the ImClone Securities Litigation for $75 million and the Mattel Securities Litigation for $122 million. Notably, it recently fought off three other plaintiffs' firms and the defendants' attorneys in the Halliburton Securities Litigation in which those attorneys attempted to settle the case for $6 million dollars. The firm was recently appointed to lead counsel positions in such cases as the Netflix Securities Litigation, Commerce Bancorp of New Jersey Securities Litigation and the Royal Dutch/Shell Pension Benefits Litigation. It has also been appointed to lead positions against such companies as Sprint, Emulex, ANR Re, priceline.com and many more.
Scott + Scott, a Connecticut-based law firm with offices in Chagrin Falls, Ohio and San Diego, California, is a law firm with a national practice and reputation. The firm is currently litigating major securities, antitrust and employee retirement plan cases throughout the United States and represents pension funds, charities, foundations, individuals and other entities worldwide -- in both class and non-class cases. Scott + Scott dedicates itself to client communication and satisfaction. Please visit our website at http://www.scott-scott.com (under reconstruction) to learn more about the firm, its practice and other cases. If you wish to discuss this action with an attorney or have any questions concerning this notice, your rights or any matter within our expertise, please contact attorney Neil Rothstein at nrothstein@scott-scott.com, Amy K. Saba at asaba@scott-scott.com or Managing Partner David R. Scott at drscott@scott-scott.com by calling 800-404-7770 (EST) or 800-332-2259 (PST). You can dial direct in California at 619-233-4565.
Scott + Scott, LLC is based at 108 Norwich Avenue, Colchester, CT 06415; phone: 860/537-3818; fax: 860/537-4432. This release is issued in accordance with the applicable U.S. federal law.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca