“Gardner said the case hit a potential challenge in November 2012, when Lorraine Brown, a former chief executive of Lender Processing’s DocX LLC subsidiary, pleaded guilty to engaging in a scheme to file fraudulent documents in foreclosures.
As part of her plea, Brown admitted taking steps to conceal the actions of herself and others from, among others, Lender Processing headquarters. That made it an “extreme challenge to trace knowledge up to senior LPS executives,” Gardner said.”
Lender Processing Services (LPS) Agrees to $14M Securities Fraud Settlement
NEW YORK (Reuters) – Mortgage servicing company Lender Processing Services Inc has agreed to pay $14 million to settle claims the company misled investors about improper practices underlying its business model, including the “robo-signing” documents, in connection with foreclosures.
The company’s settlement, disclosed in papers filed last week in U.S. District Court in Jacksonville, Florida, marked the latest securities class action settlement to spill out of the U.S. housing market crash and subsequent financial crisis.
Filed in 2010, the lawsuit accused Lender Processing and several executives of making false or misleading statements related to an alleged practice of improper “fee splitting” and of engaging in illegal document-filing practices related to foreclosures.
Following a series of disclosures about its allegedly improper business practice, Lender Processing’s stock fell 18 percent from April 2009 to October 2010.
The settlement, disclosed May 6, represents a “decent chunk of estimated damage in the case,” said lead plaintiffs’ counsel Jonathan Gardner of Labaton Sucharow, though he declined to say how much that totaled.