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Yesterday’s meltdown in the securities market was devastating to
some investors, particularly those who invested in subprime lenders.
The worst example was Accredited Home Lenders Holding Co. (NASDAQ: LEND).
Perhaps the sector was due for a correction, but the magnitude of LEND’s stock drop was exacerbated due to its complete lack of
adequate disclosure by the Company. If the Company had been more forthcoming at an earlier stage about it true financial condition,
then its stock wouldn’t have dropped over 65% in one trading session.
More importantly many investors probably wouldn’t have purchased
the stock at all.
Let’s consider what the Company disclosed yesterday before the
opening of the market. First, the Company admitted that its cash
resources have been affected primarily by margin calls since January 1,
2007 from the Company’s lenders and because of ongoing loan repurchases (which had not been previously disclosed). Second,
the Company disclosed that it is seeking waivers of certain covenants
under its loan agreements, including waivers relating to required levels
of net income. The Company has been operating under various waivers under these facilities since December 31, 2006 (which had
not been previously disclosed). Finally, the Company disclosed that it
is unlikely that the Company will file its Annual Report on Form 10-K
on time.
Investors and the market rely upon adequate disclosure which is
mandated by our Federal securities laws. The fact that Accredited
Home Lenders did not disclose key facts earlier is very troubling.
Another subprime lender that we are investigating is Fremont General Corporation (NYSE: FMT).
Shareholders Move Against HCC Insurance Holdings
Late last fall, we reported some troubling facts regarding HCC
Insurance Holdings, Inc. (NYSE: HCC) Specifically, on November 16, 2006, after the market closed, HCC announced
that it had backdated option grant dates from 1997 through 2006 and that it would restate financial reports previously filed with the
SEC and disseminated to investors in press releases. In response to this announcement, the price of HCC stock dropped materially,
falling from a close of $31.64 on November 17, 2006, to a low of $28.81 on November 20, 2006 (the next trading day), representing
a one-day share price decline of 9% on volume of 6.6 million shares.
In view of the above-mentioned facts, its not surprising that investors
have brought a class action case against the Company. Investors who
purchased between May 3, 2005 and November 17, 2006, are affected.
Shuffle Master Update
Last week, we reported some troubling developments at Shuffle
Master, Inc. (NASDAQ: SHFL), a company which engages in the
development, manufacture, sale, and marketing of technology and entertainment-based products for the gaming industry. Specifically,
on February 27, SHFL stock had declined precipitously after the company disclosed preliminary results for the quarter ended January 31,
2007. Now, the Company has disclosed more bad news. On March 12,
2007, after the close of trading, the Company disclosed that its previously
issued audited financial statements as of and for the twelve month
period ended October 31, 2006 and the unaudited selected quarterly
financial information for the three months ended October 31, 2006,
should be restated. As you would suspect, its stock dropped significantly
on this news in heavy trading. It appears that investors who purchased
stock between March 20, 2006 and March 12, 2007, may be affected.
We are investigating the situations discussed above and if you are an
affected investor in any of these cases or the other cases listed below
under investigation, you may wish to contact us at
info@securitiesleuth.com or 877 511 4717.
Other cases under investigation are:
Active Power, Inc. (NASDAQ: ACPW)
Coast Financial Holdings, Inc. (NASDAQ: CFHI)
CTS Corporation (NYSE: CTS)
Gulf Island Fabrication, Inc. (NASDAQ: GIFI)
LECG Corporation NASDAQ: (XPRT)
Nutrisystem (NNASDAQ: NTRI)
Quanta Capital Holdings, Ltd (NASDAQ: QNTA)
Now with respect to securities cases that have recently settled. If you
are an affected investor – you purchased any of these stocks during
the relevant class period, you may wish to contact the claims administrator
to obtain additional information. Remember, if you don’t submit your
claim form, you won’t receive your share of any settlement.
Catalina Marketing Corp. (POS)
Class Period: October 14, 1999 to August 25, 2003
Claim Deadline: May 21, 2007
Claims Administrator: Gilardi
Spear & Jackson, Inc. (SJCK)
Class Period: February 1, 2002 to April 1, 2003
Claims Deadline: June 26, 2007
Claims Administrator: Garden City
Information regarding other recent settled cases, including the cases
listed below can be found at www.securitiessleuth.com.
Winstar Communications (WCII)
Ibis Technology Corp. (IBIS)
Astropower, Inc. (APWR)
Again you should contact the claims administrator (rather than us).
However, if you are an affected investor in any of the companies under investigation, you many wish to contact us so that you can
consider your options.
Likewise, if you happen to be aware of corporate restatements or other financial fraud -- especially if you're a victim -- you're
encouraged to contribute to the Sleuth by giving your own tip-offs
at www.securitiessleuth.com
or by e-mailing info@securitiessleuth.com.
You can also call Mark McNair at 877-511-4717.
If you have a friend
or colleague you think would benefit from The Sleuth, please pass along
this issue and ask them to sign up at
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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