| Company: | Radian Group Inc. |
| Ticker Symbol: | NYSE: RDN |
| Class Period:: | January 23, 2007 to July 31, 2007 |
| Date Filed: | Aug-15-07 |
| Lead Plaintiff Deadline: | Oct-12-07 |
| Court: | Eastern District, PA |
| Allegations: |
A class action lawsuit has been commenced in the United States District Court for the Eastern District of Pennsylvania on behalf of purchasers of the securities of Radian Group Inc. ("Radian" or the "Company") (NYSE:RDN) between January 23, 2007 and July 31, 2007, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
The complaint charges Radian and certain of its officers and directors with violations of the Exchange Act. Radian operates, through its subsidiaries and affiliates, as a credit enhancement company that provides credit protection products and financial services to mortgage lenders and other financial institutions. One of Radian's principal affiliates is Credit-Based Asset Servicing and Securitization, known as C-BASS. C-BASS is an investor in the credit risk of subprime single-family residential mortgages.
According to the complaint, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose: (i) that the Company's $468 million investment in C-BASS was materially impaired as C-BASS was experiencing increasing margin calls and C-BASS's investments were declining in value at a significant rate; (ii) that the Company was materially overstating its financial results by failing to properly value its investment in C-BASS and by failing to write-down that investment in a timely fashion; and (iii) as a result of the foregoing, the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP") and, therefore, were materially false and misleading.
On July 30, 2007, after the market closed, Radian issued a press release announcing that "it has concluded that the value of its investment in" C-BASS has been "materially impaired." The Company further disclosed that its investment in C-BASS consists of approximately $468 million of equity as of June 30, 2007 and an additional $50 million drawn on July 20 and 23, 2007 under a $50 million unsecured credit facility that Radian provides to C-BASS. The Company also represented that although it had not determined the level of the impairment charge it "could be Radian's entire investment, less any associated tax benefit." In response to this announcement, the price of Radian common stock declined from $40.20 per share to $33.71 per share on extremely heavy trading volume.
Then, on July 31, 2007, before the market opened, C-BASS issued a press release concerning Radian's announcement of the impairment charge. According to C-BASS, at the beginning of 2007, it had $302 million of liquidity, representing more than 30% of its capital of $926 million. Thereafter, as 2007 unfolded and the subprime mortgage market crisis deepened, C-BASS received and met $290 million in margin calls from its lenders, leaving it with virtually no liquidity. However, the margin calls kept coming into C-BASS and C-BASS did not have the liquidity to meet them. In response to this announcement, the price of Radian stock declined from $33.71 per share to $27.51 per share on extremely heavy trading volume.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The complaint charges Radian and certain of its officers and directors with violations of the Exchange Act. Radian operates, through its subsidiaries and affiliates, as a credit enhancement company that provides credit protection products and financial services to mortgage lenders and other financial institutions. One of Radian's principal affiliates is Credit-Based Asset Servicing and Securitization, known as C-BASS. C-BASS is an investor in the credit risk of subprime single-family residential mortgages.
According to the complaint, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose: (i) that the Company's $468 million investment in C-BASS was materially impaired as C-BASS was experiencing increasing margin calls and C-BASS's investments were declining in value at a significant rate; (ii) that the Company was materially overstating its financial results by failing to properly value its investment in C-BASS and by failing to write-down that investment in a timely fashion; and (iii) as a result of the foregoing, the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP") and, therefore, were materially false and misleading.
On July 30, 2007, after the market closed, Radian issued a press release announcing that "it has concluded that the value of its investment in" C-BASS has been "materially impaired." The Company further disclosed that its investment in C-BASS consists of approximately $468 million of equity as of June 30, 2007 and an additional $50 million drawn on July 20 and 23, 2007 under a $50 million unsecured credit facility that Radian provides to C-BASS. The Company also represented that although it had not determined the level of the impairment charge it "could be Radian's entire investment, less any associated tax benefit." In response to this announcement, the price of Radian common stock declined from $40.20 per share to $33.71 per share on extremely heavy trading volume.
Then, on July 31, 2007, before the market opened, C-BASS issued a press release concerning Radian's announcement of the impairment charge. According to C-BASS, at the beginning of 2007, it had $302 million of liquidity, representing more than 30% of its capital of $926 million. Thereafter, as 2007 unfolded and the subprime mortgage market crisis deepened, C-BASS received and met $290 million in margin calls from its lenders, leaving it with virtually no liquidity. However, the margin calls kept coming into C-BASS and C-BASS did not have the liquidity to meet them. In response to this announcement, the price of Radian stock declined from $33.71 per share to $27.51 per share on extremely heavy trading volume.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
