Walter Investment Management
Walter Investment Management, Corp. Sued by Investor
Robbins Arroyo LLP announce that a shareholder of Walter Investment Management, Corp. (NYSE: WAC) (“Walter Investment”) has filed a complaint in the U.S. District Court for the Middle District of Florida. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between May 9, 2012 and June 6, 2013 (the “Class Period”).
Walter Investment Accused of Making False and Misleading Statements
According to the complaint, Walter Investment made false and/or misleading statements regarding the integrity of its financial reporting, including the reporting of expenses associated with certain financing transactions, and the liabilities of its recent acquisition of Reverse Mortgage Solutions (“RMS”). Specifically, the complaint alleges that the company and certain officers and directors failed to disclose that: (i) the company lacked adequate and effective internal controls over financial accounting; (ii) the company issued financial statements that were false and misleading; (iii) there were material weaknesses in the internal controls of RMS, and; (iv) the company had overstated the value of its acquisition of RMS. As a result of these false and misleading statements and omissions, Walter Investment shares traded at artificially inflated prices during the Class Period.
Walter Investment’s Stock Price Drops on News of Inadequate Financial Reporting
According to the complaint, on March 18, 2013, Walter Investment disclosed that, the company’s board of directors and management identified a material weakness in their internal controls over financial reporting. On this news, Walter Investment’s stock price dropped more than 20%, or $8.61, to close on March 19, 2013 at $32.98 per share. On June 6, 2013, the company reported that RMS’s historical financial statements and the related report of RMS’s historical independent registered accounting firm should no longer be relied upon and should be restated. More troubling, the complaint states that during the Class Period, company insiders sold over $6.9 million of their Walter Investment shares immediately prior to the collapse of the company’s share price.
If you invested in Walter Investment and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003 or you can complete the form below and we will contact you directly.