Subprime lender finds new auditor
Fremont General Corporation (NYSE: FMT, BullBoards) operates as the holding company for Fremont Investment & Loan, which engages in commercial and residential real estate lending business in the United States.
On February 28, the company's stock declined approximately 16% after it postponed disclosure of its financial results. The company also announced that it would not file its Annual Report on Form 10-K for the fiscal year ended December 31, 2006 by March 1, 2007 and that it intends to file a Form 12b-25 with the Securities and Exchange Commission explaining the reasons.
On April 10, Fremont General disclosed that the firm Squar, Milner, Peterson, Miranda & Williamson, LLP will be its new independent public accountant. Squar Milner will immediately start auditing Fremont's 2006 financial statements.
The impact of these developments has stunned Fremont General investors and FMT stock has plummeted more than two thirds since the beginning of this year.
Backdating Woes at Sonic Solutions (NASDAQ: SNIC)
Sonic Solutions (NASDAQ: SNIC, BullBoards), a digital media software company, provides various interoperable, platform-independent software tools and applications for creative professionals, business and home users, and technology partners worldwide.
On February 1, the company disclosed that it was investigating its stock option granting practices. That day SNIC shares declined $1.35 per share or approximately 8% on heavier than usual volume. Subsequently SNIC shares dropped an additional 12% on heavier than usual volume after the company announced that it would restate its financial statements for certain periods.
Update re Beazer Homes (NYSE: BZH)
Previously, we reported a sharp drop in the stock price of Atlanta-based Beazer Homes (NYSE: BZH, BullBoards). Specifically, after the close of trading on March 27, the company disclosed that Federal officials, including the Federal Bureau of Investigation, were investigating Beazer. An FBI representative stated that "There are potentially all sorts of fraud issues associated with Beazer to include corporate, mortgage or investments in varying degrees.''
Moreover, the company has had significant management problems. Two top executives have left Beazer in recent months. In March the CFO announced his resignation and left the company two days later. As well, in February the company disclosed that its general counsel had been terminated for cause "for a pattern of personal conduct which includes violations of company policies."
Now additional problems have surfaced. On March 29, the company disclosed that it had received a subpoena from the United States Attorney's Office in the Western District of North Carolina seeking documents relating to its mortgage business. Beazer Homes stated that an internal investigation has found no wrongdoing.
All these developments have been devastating to investors in Beazer Homes and shareholder litigation has been brought against the Company. Investors who purchased BZH between July 27, 2006 and March 27, 2007 are affected.
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 securitiessleuth.typepad.com or by e-mailing [email protected] 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.
Mark McNair is an attorney in private practice who represents investors in securities litigation and was formerly an attorney at the Securities and Exchange Commission. For additional information, go to securitiessleuth.com
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