Walter Investment Management Corp
Robbins Arroyo LLP: Walter Investment Management Corp. (WAC) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Walter Investment Management Corp. (NYSE: WAC) in the U.S. District Court for the Middle District of Florida. The complaint is brought on behalf of all purchasers of Walter securities between February 29, 2016 and March 13, 2017, for alleged violations of the Securities Exchange Act of 1934 by Walter’s officers and directors. Walter operates as an independent servicer and originator of mortgage loans, and a servicer of reverse mortgage loans in the United States. Among the company’s subsidiaries is Ditech Financial.
Walter Accused of Failing to Implement Adequate Financial Controls
According to the complaint, on February 29, 2016, Walter filed its Form 10-K with the U.S. Securities and Exchange Commission (“SEC”), stating that the company’s recent rebranding and consolidation of Ditech would allow Walter to improve its recapture performance. Walter subsequently stated in another SEC filing that it had taken distinct actions to improve efficiencies within the organization by restructuring its mortgage loan servicing operations and improving profitability. The complaint alleges that Walter’s public statements were misleading because Walter officials failed to disclose that Ditech had a material weakness in its internal control over operational processes and accordingly, Walter lacked effective internal controls over financial reporting.
On March 14, 2017, Walter disclosed in its Form 10-K for the year ended December 31, 2016 that “[a]s of December 31, 2016, we identified a material weakness in internal controls over operational processes within the transaction level processing of Ditech Financial default servicing activities.” Walter further revealed that it did not implement effective controls related to the company’s ability to identify and resolve foreclosure tax liens in a timely manner. As a result, the company made several adjustments to reserves during the fourth quarter of 2016 totaling $16.3 million for exposures related to deficient processes within the operating control environment for default servicing. On this news, Walter’s stock fell $1.05 per share, or 38.89%, to close at $1.65 per share on March 14, 2017.
Walter Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.