SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/ocwen/) today announced that a class action has been commenced in the United States District Court for the District of the U.S. Virgin Islands on behalf of purchasers of Ocwen Financial Corporation (“Ocwen”) (NYSE:OCN) common stock during the period between October 3, 2012 and August 11, 2014 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from August 12, 2014. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/ocwen/. Any member of the putative 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.
The complaint charges Ocwen and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Ocwen, through its subsidiaries, is engaged in the acquisition, servicing and resolution of sub-performing and non-performing residential and commercial mortgage loans in the United States and internationally.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements or omitted adverse facts about the Company’s true financial condition and business prospects by failing to disclose, among other things, that: (a) the Company was experiencing difficulties integrating the large mortgage servicing rights portfolios it had been acquiring, which was causing the Company to experience higher operating expenses from the complexities of running multiple mortgage servicing platforms; (b) Ocwen lacked sufficient internal controls related to document execution and general borrower account management and had inadequate staffing related to customer service; (c) due to certain of Ocwen’s senior officers’ and/or directors’ conflicting financial interests in Ocwen affiliates, Ocwen was taking actions adverse to borrowers in order to keep directing revenues to those affiliated companies, which was exposing Ocwen to billions of dollars in potential regulatory and civil liability; and (d) one such affiliate, Altisource Portfolio Solutions, S.A. (“Altisource”), a company in which Ocwen’s Chairman had a 27% ownership interest, had been charging exorbitant fees to Ocwen in order to funnel as much as $65 million in questionable fees to itself. As a result of defendants’ materially false and misleading statements and omissions, Ocwen shares traded at artificially inflated prices during the Class Period, reaching a high of more than $60 per share in intraday trading on October 28, 2013.
According to the complaint, the artificial inflation started to come out of Ocwen’s stock price starting in late October 2013, after a series of disclosures revealed the truth about Ocwen’s business operations. On October 31, 2013, Ocwen announced its third quarter 2013 financial results in a press release and conference call during which defendants disclosed problems the Company was having integrating its acquisitions. On December 19, 2013, the CFPB and 49 states and the District of Columbia entered into a consent judgment with Ocwen under which Ocwen would fund a $2.1 billion mortgage settlement for mortgage servicing abuses. On February 6, 2014, the New York Department of Financial Services (“NY DFS”) held up a deal Ocwen had with Wells Fargo to acquire its portfolio of mortgage servicing rights due to concerns about Ocwen’s servicing abilities. On February 26, 2014, Bloomberg reported that the NY DFS had issued a letter to Ocwen expressing concerns regarding its business transactions with related companies and its officers’ and directors’ involvement in approving transactions with said affiliated companies. On August 4, 2014, the NY DFS issued another letter to Ocwen stating that it was reviewing what it called “a troubling transaction” with Altisource relating to the provision of force-placed insurance, which is “designed to funnel as much as $65 million in fees annually from already-distressed homeowners to Altisource for minimal work,” and questioning “the role that [Ocwen’s Chairman] played in approving this arrangement,” which “appears to be inconsistent with public statements Ocwen has made, as well as representations in company SEC filings.” Then, on August 12, 2014, the Company announced that it would be forced to the restate its financial results for the fiscal year ended December 31, 2013 and the quarter ended March 31, 2014. As a result of the restatement, the Company expected to report material weaknesses in its internal controls and stated that its financial statements for those periods should no longer be relied upon. On this news, Ocwen stock closed at $25.16 per share on August 12, 2014, a 41% decline from the stock’s Class Period high price of more than $60 per share.
Plaintiff seeks to recover damages on behalf of all purchasers of Ocwen common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller, with 200 lawyers in ten offices, represents U.S. and international institutional investors in contingency-based securities and corporate litigation. The firm has obtained many of the largest securities class action recoveries in history, including the largest jury verdict ever in a securities class action. Please visit http://www.rgrdlaw.com for more information.