WASHINGTON, April 30, 2008 (PRIME NEWSWIRE) -- Notice is hereby given that Finkelstein Thompson LLP has filed a Class Action lawsuit in the United States District Court for the District of Massachusetts on behalf of a class (the "Class") consisting of all persons or entities who purchased or otherwise acquired the common stock of First Marblehead Corporation ("First Marblehead" or the "Company") (NYSE:FMD) between August 10, 2006 and April 7, 2008 inclusive (the "Class Period").
A copy of the Complaint is available from the court or from Finkelstein Thompson LLP. Please call us toll-free at (877) 337-1050 to discuss this action or to obtain a copy of the Complaint. You may also contact us by email at contact@finkelsteinthompson.com, or visit our website at http://www.finkelsteinthompson.com.
The Complaint alleges that First Marblehead and certain of its officers and directors violated the Securities Exchange Act of 1934 ("Exchange Act"). First Marblehead engages in the packaging and securitization of student loans. The Education Resources Institute ("TERI") is a nonprofit organization that guaranteed nearly all student loans originated by First Marblehead that resulted in default.
According to the Complaint, First Marblehead misrepresented or failed to disclose that: (a) First Marblehead's portfolio had experienced increasing default rates and was not performing according to the Company's representations; (b) TERI, as guarantor of First Marblehead loan securities, was not financially equipped to handle the increasing defaults; (c) a securitization in the second quarter of fiscal year 2008 was unlikely; (d) First Marblehead had a larger role in the management of TERI's day-to-day affairs than represented to investors; (e) First Marblehead was unable to manage the risk of TERI's portfolio; and (f) First Marblehead lacked adequate internal and financial controls. On April 8, 2008, First Marblehead revealed that TERI had filed for Chapter 11 Bankruptcy protection. On this news, First Marblehead shares plunged 37% to close at $4.86 per share on April 8, 2008, on unusually heavy trading.
Plaintiff seeks to recover damages on behalf of Class members and is represented by Finkelstein Thompson LLP. Finkelstein Thompson LLP has spent three decades delivering outstanding representation to institutional and individual clients in connection with securities and other finance-related litigation, and has been appointed as lead or co-lead counsel in dozens of shareholder class actions. Indeed, the firm has served in leadership roles in cases that have recovered over $1 billion for investors and consumers.
If you are a member of the class, you may request that the Court appoint you as lead plaintiff by no later than June 9, 2008. A lead plaintiff is a class member appointed by the Court to direct the litigation on behalf of the class. Although a class member need not be appointed as a lead plaintiff to receive a proportionate share of any proceeds of the litigation, lead plaintiffs make important decisions that could affect the prosecution of the class claims, including decisions concerning settlement. The securities laws create a rebuttable presumption that the plaintiff with the largest financial interest in the litigation is the most adequate to serve as a lead plaintiff. Any member of the purported class may move the Court to serve as lead plaintiff through the counsel of their choice and returning a form to counsel or communicating with counsel is not necessary to participate in any recovery.
If you are a First Marblehead shareholder and wish to discuss the case, please contact our Washington, D.C. office toll-free at (877) 337-1050, or by email at contact@finkelsteinthompson.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca.