Kehoe Law Firm, P.C. announces that a class action complaint was filed against Walter Investment Management Corp. (NYSE: WAC) in the United States District Court for the Middle District of Florida on behalf of those who purchased Walter Investment Management (“Walter” or the “Company”) securities between February 29, 2016 and March 13, 2017, for alleged violations of the Securities Exchange Act of 1934 by Walter and three current or former senior officers. Walter is a diversified independent originator and servicer of mortgage loans, and a servicer of reverse mortgage loans in the United States. Ditech Financial is one of Walter’s subsidiaries.
Walter Investment Management Corp. Accused of Failing To Implement Adequate Financial Controls
According to the complaint, on February 29, 2016, Walter filed its Form 10-K with the SEC, stating that the Company’s recent rebranding and consolidation of Ditech would allow Walter to improve its recapture performance. Walter subsequently stated in another SEC filing that it had taken distinct actions to improve efficiencies within the organization by restructuring its mortgage loan servicing operations and improving profitability. The class action complaint alleges that Walter’s public statements were misleading because Walter failed to disclose that Ditech had a material weakness in its internal control over operational processes and, thus, lacked effective internal controls over financial reporting.
On March 14, 2017, Walter Investment Management disclosed in its Form 10-K for the year ended December 31, 2016 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. Specifically, we did not design and maintain effective controls related to our ability to identify foreclosure tax liens and resolve such liens timely, foreclosure related advances, and the processing and oversight of loans in bankruptcy status. This resulted in several adjustments to reserves during the fourth quarter of 2016 totaling $16.3 million for exposures related to deficient processes within the operating control environment for default servicing.”
Following this news, Walter’s common stock dropped $1.05 per share, or 38.89%, to close at $1.65 per share on March 14, 2017.
What Can Walter Investment Management Corp. Shareholders Do?
If you purchased Walter common stock between February 29, 2016 and March 13, 2017, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], [email protected], for information about your potential legal rights. Please also feel free to complete the form on the right, and a member of the Kehoe Law Firm will contact you directly.
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.