NEW YORK, Aug. 30, 2014 (GLOBE NEWSWIRE) -- Pomerantz LLP has filed a class action lawsuit against Ocwen Financial Corporation ("Ocwen" or the "Company") (NYSE:OCN) and certain of its officers. The class action, filed in United States District Court, Southern District of Florida, West Palm Division, and docketed under 14-cv-81064, is on behalf of a class consisting of all persons or entities who purchased Ocwen securities between May 2, 2013 and August 11, 2014, inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased Ocwen securities during the Class Period, you have until October 14, 2014 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Ocwen is a financial services holding company which, through its subsidiaries, is engaged in the servicing and origination of forward and reverse mortgage loans in the United States and internationally.
The Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose material information regarding the Company's improper business and operational practices including, among other things, that Ocwen's mortgage servicing practices violated applicable regulations and laws; that the Company's executives allowed related company Altisource Portfolio Solutions, S.A. ("Altisource")—a company of which Defendant William C. Erbey, Ocwen's Chairman of the Board, owns approximately 27% of its shares outstanding-to impose wholly unreasonable rates for services provided to Ocwen; and that Defendant William C. Erbey, along with other directors and officers, were directly involved in approving Ocwen's conflicted transactions with Altisource. In addition, the Company's financial results were artificially inflated during the Class Period.
On December 19, 2013, the first of several partial disclosures regarding the Company's illicit practices in connection with its mortgage servicing business was published. A New York Times article titled "Big Subprime Mortgage Loan Servicer Agrees to $2.2 billion Settlement" announced a $2.2 billion settlement entered into by Ocwen with the Consumer Financial Protection Bureau in connection with the Company's mortgage servicing business. The article stated that the Bureau "believe[s] that Ocwen violated federal consumer financial laws at every stage of the mortgage servicing process[.]"
On February 26, 2014, an article by Bloomberg titled, "Lawsky Cites Ocwen Conflicts as He Reviews Wells Fargo Deal," continued to expose Ocwen's deficient operational practices. The article disclosed that the New York Department of Financial Services ("NY Department of Financial Services") issued a letter to the Company expressing concerns regarding Ocwen's business transactions with related companies and Defendant Erbey's and other officers' and directors' involvement in approving transactions with said affiliates.
On August 4, 2014, the NY Department of Financial Services issued a second letter to Ocwen stating that it was reviewing what it called "a troubling transaction" with Altisource relating to the provision of force-placed insurance which is "designed to funnel as much as $65 million in fees annually from already-distressed homeowners to Altisource for minimal work." The article went on to question the "the role that Ocwen's Executive Chairman William C. Erbey played in approving this arrangement" which "appears to be inconsistent with public statements Ocwen has made, as well as representations in company SEC filings."
The full truth finally emerged on August 12, 2014, when the Company disclosed yet more problems with its business and operations when it announced that certain transactions with another related company in which Defendant Erbey holds a substantial stake-Home Loan Servicing Solutions, Ltd. ("HLSS")—would lead to the Company restating its financial results for the fiscal year ended December 31, 2013 and the quarter ended March 31, 2014. As a result of the restatement, the Company announced that it expects to report material weaknesses in its internal controls. As a result of this disclosure, Ocwen's stock price declined an additional $1.18 per share, or 4.48%, on higher than average trading volume.
Overall, in response to these disclosures, the Company's stock price plummeted an aggregate 55%, from a closing of $56.00 on December 18, 2013 to a closing price of $25.16 on August 12, 2014.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
CONTACT: Robert S. Willoughby