Arbor Realty Trust, Inc. (ABR) Investigation

Arbor Realty Trust faces mounting pressure as federal authorities reportedly investigate its lending practices and loan book performance, according to sources cited by Bloomberg on July 12, 2024. This news sent Arbor's stock price tumbling over 20% during intraday trading.

The investigation follows a series of critical reports published by Viceroy Research, a forensic financial research group. Since November 16, 2023, Viceroy has issued 22 reports on Arbor, raising concerns about the company’s financial health and the value of its loan portfolio.

Viceroy’s initial report, “Arbor Realty – Slumlord Millionaires,” labeled Arbor's stock “uninvestable” due to its allegedly poor loan quality and overvalued collateral. The report further claimed that Arbor's entire loan book is distressed and unlikely to be refinanced elsewhere.

More recently, Viceroy’s May 9, 2024 report, titled “Arbor – Fraud,” alleged that Arbor has engaged in a “con” by financing purchases of its foreclosed assets through off-balance sheet entities controlled by former Arbor associates. These purchases were reportedly financed with Arbor’s own equity capital and loans originated by Arbor itself.

Viceroy has also directed its criticism towards Arbor's auditor, Ernst & Young (EY). In a July 11, 2024 email to EY, Viceroy reportedly highlighted "overwhelming evidence" suggesting Arbor's loan book is significantly impaired. The email further accuses Arbor of manipulating delinquency rates through loan modifications and financing structures that appear to be self-serving.

Arbor has not yet responded publicly to the latest federal investigation or Viceroy's specific allegations. The company previously maintained the accuracy of its financial statements and declined to comment on short seller reports. Over the past year, Arbor’s stock is down over 18 percent.

These developments have prompted shareholder rights firm Hagens Berman to commence an investigation into potential violations of the securities laws.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the ABR investigation about?

We are investigating whether Arbor may have concealed distressed deals and other assets.

WHAT SHOULD I DO?

I worked at ABR. What should I do?

If you were an employee of ABR, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in ABR, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any ABR investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.