Altisource Asset Management Corporation (NYSE: AAMC)
Hagens Berman was appointed Lead Counsel on May 12, 2015, in this case on behalf of investors in vested in Alitsource Asset Management Corporation (“AAMC”).
AAMC preys on financially vulnerable mortgage holders encouraging them to default on loans so that a related AAMC entity can purchase properties at fire sale prices. Once a distressed property was inside the AAMC umbrella, a series of AAMC-related entities would then own the loan, service the loan, and service the property itself. Those related entities included Ocwen Financial and Altisource Portfolio Solutions – all entities were founded by William Erbey. AAMC’s largest client is, in fact, another related entity, Altisource Residential.
The Complaint alleges that AAMC misrepresented or outright concealed its relationship with these companies and the extent to which the interconnected entities engaged in conflicted transactions with themselves. On December 22, 2014, AAMC announced that as part of the terms of a settlement that Ocwen had reached with the New York Department of Financial Services (the "New York DFS"), Erbey would step down as chairman of AAMC's board and from his positions at each of the related companies. As part of its investigation, the New York DFS indicated that it had uncovered “serious conflicts of interest between the Related Companies.” This triggered a landslide in AAMC’s share price – it declined over 23% per share in late 2014 before tumbling another 33% in January 2015 on news that the California Department of Business Oversight was seeking to revoke Ocwen’s license to operate in the state.
The Firm filed an Amended Complaint on June 19, 2015 alleging that during the Class Period defendants misrepresented and/or concealed the Company's relationship with, and conflicted transactions with, a group of related companies, including Ocwen Financial Corporation, all of which were founded by Defendant William Erbey. Defendants filed motions to dismiss and a request for judicial notice on July 20, 2015 and in response Hagens Berman moved to strike portions of the request for judicial notice and opposed the motion to dismiss. Both motions are fully briefed and awaiting a decision from the Court.
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