The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of Florida on behalf of all purchasers of the common stock of Opteum Inc. ("Opteum" or the "Company") pursuant or traceable to the Company's September 17, 2004 Initial Public Offering (the "IPO" or the "Offering") or the Company's December 16, 2004 Secondary Offering, and including those who purchased or otherwise acquired the Company's common stock between November 3, 2005 and May 10, 2007, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbtklaw.com.
The Complaint charges Opteum and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. More specifically, the Complaint alleges that, in connection with the Company's IPO and Secondary Offering, defendants failed to disclose or indicate the following: (1) that the Company's interest costs at the time of the IPO and Secondary Offering were substantially increasing; (2) that as a result, the Company's various approaches to risk management did not provide investors reasonable protections against losses; and (3) that the Company lacked adequate internal and financial controls.
Additionally, throughout the Class Period, defendants failed to disclose additional material adverse facts about the Company's financial well-being, business relationships, and prospects. Specifically, defendants failed to disclose or indicate the following: (1) that the Company's integration of Opteum Financial Services, LLC ("OFS") was not proceeding according to plan; (2) that the Company's risk management controls and procedures were incompatible with OFS' risk management controls and procedures; (3) that OFS' loans were designed to produce short-term financial results, which would subject the Company to unreasonable long-term risk and expenses; (4) that the Company had improperly valued and monitored collateral; (5) that the Company had underreported its loan loss reserves; (6) that the Company's book value and projected cash flows were materially overstated; (7) that the Company had failed to adequately hedge its exposure to losses; (8) that the Company and OFS lacked adequate internal and financial controls; (9) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (9) that, as a result of the above, the Company's financial statements were false and misleading at all relevant times; and (10) that, as a result of the foregoing, the Company's guidance about its 2007 financial and operational results were lacking in any reasonable basis when made.
On May 10, 2007, the Company shocked investors when it reported its first quarter 2007 financial and operational results. The Company reported $12.2 million in negative fair value adjustments to OFS' mortgage servicing rights, $1.3 million in negative fair value adjustments to OFS' residuals, and $8.8 million in asset write downs at OFS. Additionally, the Company revealed that nearly 50 percent of the Company's first quarter loss, or $37.4 million, was attributable to a valuation allowance on OFS' deferred tax assets, nearly 17.5 percent of the loss was attributable to negative fair value adjustments to OFS' mortgage servicing rights and retained interests in securitizations, and slightly more than 10 percent of the loss was attributable to asset write downs at OFS, due in part to the Company's decision to exit the mortgage origination business. Also, the Company revealed that its quarterly loss included $14.1 million in negative fair value adjustments to mortgage loans held for sale and interest rate lock commitments, and hedging losses of $4.6 million. On this news, shares of the Company's stock fell $1.37 per share, or over 25 percent, to close on May 11, 2007 at $4.08 per share, on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler which prosecutes class actions in both state and federal courts throughout the country. Schiffrin Barroway Topaz & Kessler is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.
For more information about Schiffrin Barroway Topaz & Kessler or to sign up to participate in this action online, please visit http://www.sbtklaw.com.
If you are a member of the class described above, you may, not later than November 19, 2007, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin Barroway Topaz & Kessler or other counsel of your choice, to serve as your counsel in this action.
