NEW YORK, Aug. 16, 2007 (PRIME NEWSWIRE) -- Seeger Weiss LLP announces that it filed a class action lawsuit today in the United States District Court For The Eastern District of Pennsylvania on behalf of purchasers of RAIT Financial Trust ("RAIT" or the "Company") (NYSE:RAS) common stock in the open market between January 10, 2007 to July 31, 2007, inclusive (the "Class Period"). The complaint seeks remedies for the class under the Securities Exchange Act of 1934 (the "Exchange Act").
The Complaint charges RAIT, Betsy Z Cohen, Daniel G. Cohen, and Jack E. Salmon violated sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period. RAIT is a specialty finance company that provides a comprehensive set of debt financing options to the real estate industry.
According to the complaint, during the class period, the defendants failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company had acquired inherently risky loans and financing instruments; (2) that American Home Mortgage's ("AHM") payments on these loans and financing instruments were in jeopardy due to AHM's business practices; (3) that if AHM failed to make payments on its loans and financing instruments, the Company would suffer a net exposure of $95 million; and (4) that the Company had failed to adequately reserve for the risk of nonpayment by AHM.
On July 31, 2007, the Company shocked investors when it announced that AHM had failed to make its trust preferred financing payment to the Company, in stark contrast to earlier statements. The Company also disclosed for the first time that it had a net equity exposure to AHM of approximately $95 million, or $1.56 per share of book value, which resulted from trust preferred financing provided to AHM in 2005. On this news, shares of the Company's stock declined $5.72 per share, or 35.5 percent, to close on July 31, 2007 at $10.36 per share, on unusually heavy trading volume. Shares of the Company's stock continued to decline the following day, losing an additional $0.54 per share, or 5.2 percent, to close on August 1, 2007 at $9.82 per share, also on unusually heavy trading volume. As of the close of trading on August 15, 2007, RAS was trading at $6.68.
Seeger Weiss is a New York-based law firm that is active in major complex litigations and class actions pending in federal and state courts throughout the United States. Seeger Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers and others and has recovered millions of dollars for clients and class members.
If you are a member of the class described above, you may, no later than September 30, 2007, move before the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Seeger Weiss LLP, or other counsel of your choice, to serve as your counsel in this action.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact us:
Christopher A. Seeger, Esq. Stephen A. Weiss, Esq. Eric T. Chaffin, Esq. Seeger Weiss LLP One William Street New York, New York 10004 E-Mail: cseeger@seegerweiss.com sweiss@seegerweiss.com echaffin@seegerweiss.com Tel.: (212) 584-0700 Toll Free: (877) 541-3273 www.seegerweiss.com
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca/