NEW YORK, May 13, 2008 (PRIME NEWSWIRE) -- On May 12, 2008, Scott+Scott LLP filed a class action against First Marblehead Corp. ("First Marblehead" or the "Company") (NYSE:FMD), and certain officers and directors, in the U.S. District Court for the District of Massachusetts. The action is on behalf of those purchasing First Marblehead common stock during the period beginning August 10, 2006, to April 7, 2008, inclusive (the "Class Period"), for violations of the Securities Exchange Act of 1934. The complaint alleges that defendants made false and misleading statements and material omissions regarding the Company's business and operations and that, as a result, the price of the Company's securities was inflated during the Class Period, thereby harming investors.
If you purchased First Marblehead stock during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than June 9, 2008. Any member of the investor class may move the Court to serve as lead plaintiff through counsel of its 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 (scottlaw@scott-scott.com, (800) 404-7770, (860) 537-5537 or visit the Scott+Scott website, http://www.scott-scott.com) for more information. There is no cost or fee to you.
According to the complaint, during the Class Period, the Company issued materially false and misleading statements that misrepresented and failed to disclose that loans underlying the Company's bonds were experiencing increasing default rates; that the guarantor of those loans did not have the money to buy all of the loans that were in default; that the Company lacked adequate internal and financial controls; and that, as a result of the foregoing, banks would look elsewhere to package their loans, which would have a negative impact on First Marblehead's business and operations.
On April 8, 2008, the Company announced that the guarantor of the loans had filed a bankruptcy petition under Chapter 11. On this news, shares of the Company's stock fell $4.16 per share, or 54%, over the next five trading days, as the investing public continued to digest this news.
The plaintiff is represented by Scott+Scott, a firm with significant experience in prosecuting major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals and other entities worldwide.
More information on this and other class actions can be found on the Class Action Newsline at http://www.primenewswire.com/ca/