NEW ORLEANS, May 8, 2007 (PRIME NEWSWIRE) -- Kahn Gauthier Swick, LLC ("KGS") announces that it has commenced an investigation into Fremont General Corporation ("Fremont" or the "Company") (NYSE:FMT) to determine whether it has violated federal securities laws by issuing a series of materially false and misleading statements during the period March 16, 2006 through February 28, 2007.
Shares of Fremont fell to $8.81 on February 28, 2007, a loss of $3.64, or 29 percent, from the intraday high of $12.45 achieved the previous day, after the Company delayed its 4th quarter earnings report. Days later, on March 2nd, Fremont announced that it was exiting the subprime residential real estate lending business, which the Company said was prompted by the receipt of a proposed cease-and-desist order from the Federal Deposit Insurance Corporation that called for Fremont to restrict the level of lending in its subprime residential mortgage business.
Thereafter, just weeks after booking a $140 million pretax loss in the sale of $4 billion of its subprime residential real estate loan portfolio, on April 2, 2007, Fremont announced the resignation of its auditor, Grant Thornton LLP -- only eight months after the Company hired the firm. In support of its resignation, Grant Thornton filed a letter with the SEC stating it was unable to "evaluate or determine the completeness, sufficiency or timeliness of the information provided in response to our requests."
If you are a Fremont shareholder who purchased shares between the dates of March 16, 2006 and February 28, 2007, and would like to discuss your legal rights, you may e-mail or call KGS, without obligation or cost to you. You may contact Managing Partner Lewis Kahn of KGS direct, toll free 1-866-467-1400, ext., 100, or by email at lewis.kahn@kgscounsel.com. KGS focuses its practice on securities fraud litigation, and the firm's lawyers have significant experience working on securities fraud cases that have resulted in significant recoveries for shareholders. For more information on KGS, please visit www.kgscounsel.com.