Municipal Mortgage & Equity, LLCCohen Milstein has filed a lawsuit on behalf of its client and a proposed class of persons who purchased and/or acquired the common stock of Municipal Mortgage & Equity, LLC (“MuniMae” or the “Company”) (OTC:MMAB.PK) between May 3, 2004 and January 29, 2008, inclusive (the “Class Period”), in the United States District Court for the District of Maryland, Northern Division. The complaint charges MuniMae and six of the Company’s officers and directors: Chief Executive Officer, Michael L. Falcone; Chairman and former CEO, Mark K. Joseph; former Executive Vice President and Chief Financial Officer ,William S. Harrison; former CFO, Melanie M. Lundquist; Chief Operating Officer and interim-CFO, Charles M. Pinckney; and CFO, David Kay (collectively, the “Defendants”), with violations of the Securities Exchange Act of 1934. According to the complaint, the defendants allegedly knowingly or recklessly issued false and misleading statements that materially misrepresented MuniMae’s earnings and financial results, causing the Company’s stock price to be artificially inflated throughout the class period. According to the Complaint, on March 10, 2006, MuniMae issued a press release disclosing that the Company would be restating more than three years of earnings and that the Company would delay the filing of its Form 10-K for fiscal 2005. According to this press release, the restatement was needed to correct accounting errors related to related to: “1) recognition of syndication fees, 2) application of equity method accounting, 3) recognition of interest income, and 4) amortization of mortgage servicing rights.” However, Defendants assured investors that the restatement would “not impact cash available for distribution,” and would actually result in an increase in “previously reported net earnings” for certain periods. The complaint further alleges that, after obtaining numerous extensions to complete its restatement of financial results from the SEC and New York Stock Exchange (“NYSE”) on January 28, 2008, MuniMae disclosed that it would not complete its restatement of financial results by the March 3, 2008 deadline imposed by the NYSE, and therefore, Defendants expected the Company’s stock to be delisted. On this news, the price of MuniMae stock dropped from $17.20 per share to close at $9.19 per share on January 29, 2007, representing a 47% single-day decline. The following day, on January 29, 2008, MuniMae filed with the SEC a report on Form 8-K that provided additional details regarding the restatement, including the fact that the Company was required to consolidate on its balance sheet approximately 200 “variable interest entities” in which it holds minority interests, and the Company would be writing-down the fair value of impaired assets “held-for-sale” including loans, bonds, derivatives, guarantee obligations, and mortgage servicing rights. On this news, the price of MuniMae stock dropped an additional 22%, to close at $7.13 per share on January 30, 2008. If you purchased or acquired MuniMae securities during the Class Period, you may, no later than March 31, 2008, move the court to be appointed as Lead Plaintiff. There are certain legal requirements to serve as Lead Plaintiff. Any member of the purported class may move the court to serve as Lead Plaintiff through counsel of their choice or may choose to remain an absent class member. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as Lead Plaintiff. To be a member of the class, you need not take any action at this time. If you have any questions about this notice or the action, or with regard to your rights, please contact either of the following: Steven J. Toll, Esq.
Laura Armstrong
Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
1100 New York Avenue, N.W.
West Tower – Suite 500
Washington, D.C. 20005
Telephone: (888) 240-0775 or (202) 408-4600
E-mail: stoll@cmht.com or larmstrong@cmht.com |
