Saxena White P.A. Files Shareholder Suit on Behalf of Institutional Investor Against First Marblehead Corporation
BOCA RATON, FL--(Marketwire - April 16, 2008) - Notice is hereby given that Saxena White
P.A. has filed suit on behalf of shareholders of The First Marblehead
Corporation. ("First Marblehead" or the "Company") (NYSE: FMD) in the
United States District Court for the District of Massachusetts.
The complaint, filed on behalf of Sheetmetal Workers Local 28 Pension Fund,
seeks damages for violations of federal securities laws on behalf of all
investors who purchased First Marblehead securities between August 10, 2006
through April 7, 2008, inclusive (the "Class Period"). First Marblehead
provides outsourcing services for private education lending in the United
States. Throughout the Class Period, Defendants reported quarter after
quarter of seemingly strong financial results and touted the Company's
ability to complete additional securitizations despite a difficult
operating environment in the lending industry. As a result of Defendants'
statements, the stock traded as high as $57.56 per share during the Class
Period.
The veracity of defendants' Class Period statements was first called into
question on November 26, 2007. At that time, Friedman, Billings, Ramsey
downgraded First Marblehead to under-perform from market-perform, citing an
increased risk that loss reserves associated with securitization might not
be sufficient. This meant that the previously reported value of First
Marblehead's back-end rights and all management-supplied estimates of
future earnings were in jeopardy.
On December 4, 2007, Moody's Investors Service announced that it was
performing a review of the Company and that it might lower ratings on $822
million of securities created by First Marblehead from 2003 through 2007.
Subsequently, on March 26, 2008, Moody's downgraded 18 classes of notes in
11 First Marblehead student loan securitizations, affecting approximately
$1.09 billion of the Company's asset-backed securities.
On April 8, 2008, First Marblehead lost over a third of its value after The
Education Resources Institute, Inc. ("TERI"), the Company's guarantor of
private student loans, filed for bankruptcy protection. As a result, the
Company may incur substantial losses arising from defaults on its student
loans. After the TERI bankruptcy announcement, First Marblehead's stock
sank to $4.89, a decline of 36.5% from the day before. The Company's stock
had already fallen 50 percent in the several months since the truth of its
precarious financial position was finally revealed.
You may obtain a copy of the complaint from the Court, by contacting Saxena
White P.A. through its website www.saxenawhite.com, by emailing
jwhite@saxenawhite.com or gstone@saxenawhite.com or by calling (561)
394-3399.
If you acquired First Marblehead's securities from August 10, 2006 through
April 7, 2008, you may wish to contact Joe White or Greg Stone at Saxena
White P.A. to discuss your rights and interests.
If you wish to apply to be the lead plaintiff in this action, a motion on
your behalf must be filed with the court no later than June 9, 2008. You
may contact Saxena White P.A. to discuss your rights regarding the
appointment of lead plaintiff and your interest in the class action. Please
note that you may also retain counsel of your choice and need not take any
action at this time to be a class member.
Saxena White P.A. has offices in Boca Raton, San Francisco, and Boston, and
specializes in prosecuting securities fraud and complex class actions on
behalf of institutions and individuals. Currently serving as lead counsel
in numerous securities fraud class actions nationwide, the firm has
recovered millions of dollars on behalf of injured investors.
Contact Information: Contact:
Joseph White, Esq.
Greg Stone
Saxena White P.A.
2424 North Federal Highway
Suite 257
Boca Raton, FL 33431
Tel: (561) 394-3399
Fax: (561) 394-3382
www.saxenawhite.com