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Investor Lawsuits Filed, Dismissed

Investor Lawsuits Filed, DismissedRecent mergers, investor lawsuits and other corporate activity

May 29, 2008


Two mortgage companies announced planned public offerings. And as an investor class-action lawsuit was dismissed against one mortgage lender, another investor lawsuit was filed against a different company. Meanwhile, an acquisition of The Bear Stearns Companies Inc. that was brokered by the Fed in emergency negotiations was approved by the beleaguered firm’s shareholders.

MFA Mortgage Investments Inc. announced Tuesday an 18 million share public offering of its common shares with an over-allotment of up to 2.7 million shares for underwriters. Based on today’s share price of $7.21, the offering will generate around $130 million.

New York Mortgage Trust Inc. announced Wednesday it has met all necessary conditions to complete a 1-for-2 reverse stock split of its common stock. Its shares started trading today under the symbol “NYMO” on the OTC Bulletin Board.

Impac Mortgage Holdings Inc. said yesterday it is considering offering common shares in exchange for its Series B and Series C preferred stock. A successful offering would preserve cash by reducing the real estate investment trust’s continuing obligation to pay or accrue quarterly preferred dividends.

In addition, Irvine, Calif.-based Impac reported that a judge dismissed an investor class-action lawsuit originally filed against it in January 2006. Impac Chairman and Chief Executive Officer Joseph R. Tomkinson called the dismissal a “huge win.”

But the news wasn’t so good for Downey Financial Corp., which was sued on behalf of buyers of its shares from Oct. 16, 2006, to March 14, 2008. The law firm of Charles H. Johnson & Associates announced the filing of the class action, noting that the Newport Beach, Calif.-based company reported on March 17 that non-performing assets had reached 11 percent of total assets.

Frederic S. Mishkin will resign from the Board of Governors of the Federal Reserve System on Aug. 31, an announcement Wednesday said. He plans to return to the Graduate School of Business at Columbia University as a professor of economics and resume teaching in the fall.

The Federal Deposit Insurance Corporation reported it issued cease-and-desist orders against Security Pacific Bank in Los Angeles; Herrin Security Bank, Herrin, Ill.; and Sun Security Bank, Ellington, Mo. Removal and Prohibition Orders were issued against State Bank of Whittington, Benton, Ill.; Main Street Bank & Trust, Champaign, Ill.; and Bristol County Savings Bank, Taunton, Mass.

Civil Money Penalties were levied against Bank of Guam, Hagatna, Guam; Eureka Savings Bank, La Salle, Ill.; Avon State Bank, Avon, Minn.; Gateway Bank of St. Louis; Sherman County Bank, Loup City, Neb.; Fiserv Trust Co., Denver; Capital One Bank, Glen Allen, Va.; and Peoples State Bank, Wausau, Wis., FDIC said.

FDIC added that it terminated cease-and-desist orders against Bank of Guam, Hagatna, Guam; Bank of Commerce, Greenwood, Miss.; and Miami Valley Bank, Lakeview, Ohio.

JPMorgan Chase & Co.’s acquisition of The Bear Stearns Companies Inc. was approved by 84 percent of Bear shareholders who voted at a special meeting of stockholders held earlier today, a press release said. The deal is slated to close tomorrow. Bear will become a direct subsidiary of JPMorgan.

The statement also said that the Federal Reserve Bank of New York and JPMorgan have agreed to delay the sale of $30 billion in Bear assets until around June 26 to ensure a smooth transfer of the massive portfolio.

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