Pomerantz LLP announces that a class action lawsuit has been filed against Walter Investment Management Corporation (“Walter” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Middle District of Florida, and docketed under 17-cv-00645, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Walter securities between February 29, 2016 and March 13, 2017 both dates inclusive (the “Class Period”), seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
Walter Investment Management Corporation, a diversified mortgage banking firm, focuses primarily on the servicing and origination of residential loans in the United States. Among the Company’s subsidiaries is Ditech Financial (“Ditech”).
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company’s Ditech subsidiary had a material weakness in its internal control over operational processes; (ii) accordingly, the Company lacked effective internal controls over financial reporting; and (iii) as a result of the foregoing, Walter’s public statements were materially false and misleading at all relevant times.
On March 14, 2017, Walter filed its Annual Report on Form 10-K with the Securities and Exchange Commission, reporting the Company’s financial and operating results for the quarter and year ended December 31, 2016 (the “2016 10-K”). In the 2016 10-K, Walter disclosed that “[a]s of December 31, 2016, we identified a material weakness in internal controls over operational processes within the transaction level processing of Ditech Financial default servicing activities.”
On this news, Walter’s share price fell $1.05, or 38.89%, to close at $1.65 on March 14, 2017.