COLCHESTER, Conn., Jan. 12, 2006 (PRIMEZONE) -- Scott+Scott, LLC (http://www.scott-scott.com), at the direction of clients, has filed a securities fraud class action in the United States District Court for the Central District of California against Impac Mortgage Holdings, Inc. ("IMH" or the "Company") (NYSE:IMH) and individual defendants. Presently, the class is defined in the complaint as those who purchased Impac securities between May 13, 2005, and August 9, 2005, inclusive (the "Class Period"). However, any purchaser of Impac securities can contact the firm as the Class Period may change as information is revealed. Impac is a mortgage real estate investment trust ("REIT") that acquires, originates, sells and invests primarily in non-conforming and sub-prime ("B/C") mortgages, including warehouse and repurchase financing to originators of mortgages.
If you purchased Impac securities during the Class Period and wish to serve as a lead plaintiff in the action, you must move the court no later than March 13, 2006. 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. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott for more information. Scott+Scott will provide class members with case materials, answer all questions regarding participation and rights and assist with other services the firm provides. There is no cost or fee to you. Contact Scott+Scott partners Neil Rothstein (scottlaw@scott-scott.com or 800/332-2259) or David R. Scott (drscott@scott-scott.com or 800/404-7770).
The complaint alleges that defendants violated provisions of the United States securities laws causing artificial inflation of the Company's stock price. According to the complaint, during the Class Period, the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company lacked adequate internal controls and systems for corporate compliance, necessary to accurately ascertain the Company's overall condition; (2) that the Company's quarterly guidance concealed the true financial health of the Company; and (3) that as a result, the Company's statements with respect to its future prospects and the intrinsic value of its business lacked an objective basis.
According to the complaint, while the Company heralded extraordinarily positive financial guidance and business prospects, the defendants knew but failed to reveal that their material indicators of the Company's true financial condition pointed to lower than expected results for the second fiscal quarter of 2005, as compared to previous quarters. Rather than disclose this adverse information to investors, Company insiders, including defendants, sold more than 300,000 shares of Company stock, reaping more than $5.5 million in proceeds. Then, on August 9, 2005, IMH shocked the market, by posting a net loss of $55 million, or 78 cents per share, compared to prior year profits of $143.2 million, or $2.17 per share. The shocking news included a forecast for a steep reduction in third quarter dividends, falling as much as 33% versus the previous quarter, to $0.50 to $0.60 per share. On the news, IMH shares plunged nearly 40% from a Class Period high of $22.32, to close at $13.46 on August 10, 2005, on exceptionally heavy volume of over 6.4 million shares.
The plaintiff is represented by Scott+Scott, LLC, which has significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan class actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide. Cases currently being litigated and/or investigated by Scott+Scott, LLC include: Refco, Inc.; Guidant Corp.; Abbott Laboratories; Halliburton; TRM Corp.; and Faro Tech., among others. Its success has brought shareholders hundreds of millions of dollars in cases against Mattel, Royal Dutch/Shell, Sprint, ImClone and others.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.