Law Offices of Howard G. Smith Announces Class Action Lawsuit against Lender Processing Services, Inc.
BENSALEM, Pa.–(BUSINESS WIRE)– Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of all persons or entities who purchased the common stock of Lender Processing Services, Inc. (“LPS” or the “Company”) (NYSE:LPS – News) between July 29, 2009 and October 4, 2010, inclusive (the “Class Period”). The class action lawsuit was filed in the United States District Court for the Middle District of Florida.
LPS provides integrated technology, mortgage processing services and outsourced services to the mortgage lending industry in the United States. The Complaint alleges that during the Class Period the Company and certain of its executive officers violated federal securities laws by issuing material misrepresentations to the market concerning the Company’s business, operations and financial performance, thereby artificially inflating the price of LPS securities.
No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased LPS common stock between July 29, 2009 and October 4, 2010, you have certain rights, and have until January 24, 2011, to move for lead plaintiff status. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215)638-4847, Toll-Free at (888)638-4847, by email to firstname.lastname@example.org or visit our website at www.howardsmithlaw.com.
From the complaint…
This is a securities class action on behalf of all persons who purchased or otherwise acquired the common stock ofLPS between July 29, 2009 and October 4,2010, inclusive (the “Class Period”), against LPS and certain of its officers and/or directors for violations of the 1934 Act. These claims are asserted against LPS and certain of its officers and/or directors who made materially false and misleading statements during the Class
Period, among other things, in press releases, analyst conference calls, and filings with the SEC.
During the Class Period, defendants issued materially false and misleading statements regarding the Company’s business practices and financial results. Specifically, defendants failed to disclose that the Company had been engaging in deceptive and improper document execution and preparation related to foreclosure proceedings. The result of defendants’ scheme was that the Company was able to report positive financial performance and issue positive financial guidance during the Class Period. As a result of defendants’ false statements, LPS stock traded at artificially inflated prices during the Class Period, reaching a high of $43.99 per share on October 23,2009.
In early 2010, the u.S. attorney’s office in the Middle District of Florida announced investigations of LPS and its subsidiary Docx, for their improper use of false documents to foreclose on Florida homeowners. The civil investigation focuses on allegations that LPS engaged in creating and manufacturing “bogus assignments” of mortgage ownership in order to complete foreclosures quicker. The documents at the center
of the investigations appear to be forged, as well as incorrectly and illegally executed. Multiple investigations have since commenced, including a criminal investigation by the Florida Attorney General, the Justice Department, and several other states.
In September and October 2010, mUltiple large banking institutions, including J.P. Morgan Chase & Co., Ally Financial Inc., the parent company ofGMAC Mortgage, and -Bank of America Corp., all halted foreclosures as a result of document problems amid allegations that the banking industry – through companies such as LPS – has used “robo signers.” Among other things, these “robo signers” signed documents without reviewing
their contents or confirming their accuracy. A target of several investigations into grossly improper misconduct involving mortgage foreclosures, LPS has been accused of signing documents without, among other things, having them properly reviewed for accuracy.
According to media reports and various investigations, the Company’s default services division has also been accused of improperly splitting fees with attorneys, calling into question the source ofa substantial portion of the Company’s revenue. In response to the growing maelstrom of negative facts coming to light, on October 4, 2010, LPS released a statement regarding what the Company considered “mischaracterizations of its services.”
On this news, the price ofLPS stock dropped sharply, falling $2.72 per share, or 8.6%, on October 4,2010, to close at $28.76. The stock fell another $1.45 per share, or 5.04%, on October 5, 2010, to close at $27.31 per share, on unusually heavy trading volume.
The true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows:
(a) the Company failed to disclose that it had engaged in improper and deceptive business practices;
(b) the Company’s subsidiary Docx had been falsifying documents through the use of robo signers;
(c) the Company had engaged in improper fee sharing arrangements with foreclosure attorneys and/or law firms, including, but not limited to, undisclosed contractual arrangements for impermissible legal fee splitting, which are camouflaged as various types of fees;
(d) as a result of the Company’s deceptive business practices, the Company reported misleading financial results; and
(e) as a result of the foregoing, at all relevant times, the Company’s financial outlook lacked a reasonable basis.
Defendants’ false statements and omissions caused LPS common stock to trade at artificially inflated prices during the Class Period. After the above revelations seeped into the market, however, the Company’s shares were hammered by massive sales, sending them down approximately 37.9% from their Class Period high.
Who woulda thunk…
Full complaint below…