PHILADELPHIA, May 22, 2008 (PRIME NEWSWIRE) -- The law firm of Spector Roseman & Kodroff, P.C. announces that a securities class action lawsuit was commenced in the United States District Court for the Eastern District of Michigan, on behalf of all persons and entities who purchased or otherwise acquired the securities of MGIC Investment Corporation ("MGIC" or the "Company") (NYSE:MTG) during the period from February 6, 2007 through February 12, 2008 (the "Class Period").
MGIC operates, through its subsidiaries and affiliates, as a credit enhancement company that provides credit protection products and financial services to mortgage lenders and other financial institutions. One of MGIC's affiliates is Credit-Based Asset Serving and Securitization ("C-BASS"), which is engaged in the business of investing in credit-sensitive residential mortgage assets.
The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that defendant issued materially false and materially misleading statements that misrepresented and failed to disclose that: (a) the C-BASS acquisition of Fieldstone adversely affected C-BASS liquidity; (b) the Company's $516 million investment in C-BASS was materially impaired; (c) the Company's loss reserves were inadequate in light of the worsening housing market and increases in defaults and foreclosures; (d) the Company's Wall Street bulk transaction business was experiencing substantial losses and no reserves were established to absorb the losses; and (e) because of the increases in losses and drain on liquidity, MGIC was not adequately capitalized.
On July 30, 2007, after the market closed, MGIC issued a press release announcing that the value of its investment in C-BASS was "materially impaired." In response to this announcement, on July 31, 2007 the price of MGIC's common stock declined from $45.44 per share to $38.66, on extremely heavy trading volume.
Then, on February 13, 2008, MGIC disclosed that it lost $1.47 billion, or $18.17 a share, in the fourth quarter of 2007. The Company blamed the loss, in part, on a $1.2 billion "premium deficiency reserve" relating to Wall Street bulk transactions. On February 13, 2008, MGIC's stock price closed at $12.61 a share, which represented a nearly $60 a share decline from the Class Period high.
If you purchased the publicly traded securities of MGIC during the Class Period, you may, no later than July 15, 2008, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative chosen by the Court that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) has the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth.
If you sustained substantial losses in MGIC securities during the Class Period, wish to join this action, or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at (888) 844-5862 or e-mail at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time. For more detailed information about the firm please visit its website at http://www.srk-law.com .
Spector Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on numerous occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, as well as consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered through judgments and settlements on behalf of thousands of defrauded investors, consumers and companies.
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