NEW YORK, Jan. 10, 2006 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it has filed a class action suit on behalf of all securities purchasers of Impac Mortage Holdings, Inc. (NYSE:IMH); ("IMH" or the "Company") between May 13, 2005, and August 9, 2005, both dates inclusive (the "Class Period").
The action, entitled, Schriver v. Impac Mortgage Holdings, Inc. Case No. SACV-06-0031 CIC (RNBx), is pending in the United States District Court for the Central District of California, and names as defendants, the Company as well as certain senior officers and directors. A copy of the complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.com.
The Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that, during the Class Period, the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company lacked an adequate internal system of controls necessary to accurately ascertain the Company's overall condition; (2) that the Company's quarterly guidance concealed the true financial health of the Company; (3) that as a consequence of the foregoing, the Company's statements with respect to its future prospects and the intrinsic value of its business lacked in all reasonable basis.
IMH is a mortgage real estate investment trust ("REIT") that acquires, originates, sells and invests primarily in non-conforming, Alt-A mortgages, small-balance, multi-family mortgages, and sub-prime or B/C mortgages. The Company also provides warehouse and repurchase financing to originators of mortgages.
According to the complaint, while the Company was unabashedly positive in its public statements, the defendants knew but failed to reveal that material indicators of the Company's true financial condition would be lower than expected for the second fiscal quarter of 2005, as compared to previous quarters. Rather than disclose this adverse information to investors, Company insiders, including defendants, took the opportunity to sell more than 300,000 shares of their personally held Company stock, reaping more than $5.5 million in proceeds. Shortly thereafter, on August 9, 2005, IMH shocked the market, revealing that it was posting a net loss of $55 million, or 78 cents per share, compared to a profit of $143.2 million, or $2.17 per share, a year earlier and forecasted a reduced dividend of .50 cents to .60 cents a share in the third quarter (down from the previous .75 cents per share). On this news, IMH shares plunged approximately 40% from a Class Period high of $22.32 to close at $13.46 on August 10, 2005 on volume of nearly 6.5 million shares -- or roughly 13 times above average daily volume.
If you are a member of the class described above, you may, not later than sixty (60) days from today, move 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 Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. 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 the following:
Wechsler Harwood LLP Jeffrey M. Norton, Esq. jmn@whesq.com 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 (ext. 286) http://www.whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.