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Pmi Group : Dreier LLP Announces Class Action Lawsuit Against The PMI Group, Inc. (PMI)

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03/17/2008 | 03:47pm CEST

NEW YORK, March 17 /PRNewswire/ -- Dreier LLP (http://www.dreierllp.com) announces that a class action lawsuit was commenced in the U.S. District Court for the Northern District of California on behalf of investors who purchased The PMI Group, Inc. ("PMI" or the "Company") (NYSE: PMI) common stock during the period from November 2, 2006 through March 3, 2008, inclusive (the "Class Period"). The Complaint alleges that PMI and certain of the Company's officers and directors (collectively, the "Defendants") violated the Securities Exchange Act of 1934.

If you purchased PMI common stock during the Class Period, you may be a member of the proposed Class. You must move the Court on or before May 12, 2008 if you wish to serve as a lead plaintiff. Lead plaintiffs must meet certain legal requirements. If you purchased PMI common stock and want to discuss your legal rights, you may contact Bruce D. Bernstein ([email protected]) of Dreier LLP at 800-952-8897. Class members may retain counsel of their choice and move the Court to serve as a lead plaintiff, or may choose to do nothing and remain absent class members.

PMI, through its subsidiaries, provides credit enhancement products designed to promote homeownership and facilitate mortgage transactions in the capital markets in the United States, Australia, New Zealand and the European Union.

The Complaint alleges that during the Class Period, Defendants misled investors by making materially false and misleading statements concerning PMI's business and financial results. Among other things, the Complaint alleges that Defendants failed to disclose that: (i) due to the drop-off in value of its mortgage debt, PMI's investment in FGIC Corporation ("FGIC"), was materially impaired as FGIC's bond insurance arm, Financial Guaranty, had significant exposure to defaults on bonds that it insured; (ii) in violation of Generally Accepted Accounting Principles ("GAAP"), PMI materially overstated its financial results by materially inflating the value of its investment in FGIC and by failing to write down that investment in a timely fashion; (iii) PMI was not adequately accounting for its loss reserves in violation of GAAP, causing its financial results to be materially misstated; (iv) PMI had not sufficiently disclosed its overexposure to anticipated losses and defaults related to its book of business related to insurance written in 2005 through most of 2007; and (v) PMI had no reasonable basis to make projections about its losses or about new insurance written due to the increased volatility in the subprime market.

On March 3, 2008, after the market closed, PMI announced its preliminary fourth quarter 2007 financial results and that it would be delayed in filing its Form 10-K for year-end 2007 because it was awaiting financial information from FGIC, which was necessary for the Company to complete its financial statements. As a direct and proximate result of this news, on March 4 the price of PMI stock declined $0.35 per share to close at $6.43 per share, a one day decline of 5%, on extremely high trading volume.

Dreier LLP's Class Action Litigation Group has vast experience representing domestic and foreign institutional and individual investors in securities and other class actions throughout the country. The partners who head Dreier LLP's Class Action Litigation Group have successfully prosecuted securities fraud class actions in a wide variety of industries and have played a significant role in cases that have resulted in some of the largest securities class action settlements. Prior results do not guarantee a similar outcome. As of the date of this Notice, Dreier LLP has not filed a Complaint against PMI.

Background on Dreier LLP

Dreier LLP was founded in 1996 by Marc Dreier as a more responsive and innovative alternative to traditional "large-firm" lawyering. Dreier LLP represents a wide range of institutional, entrepreneurial and individual clients in diverse sectors of financial, industrial and service-oriented markets. The firm's principal practices are commercial litigation, class action litigation, real estate, bankruptcy and corporate reorganization, employment, corporate and securities, entertainment, intellectual property, matrimonial and tax. Dreier LLP's Los Angeles affiliate, Dreier Stein Kahan Browne Woods George LLP, has its principal practice in entertainment and commercial litigation and corporate transactions. The firm's New York affiliate Schlesinger Gannon & Lazetera LLP has an extensive practice in the area of trusts and estates law. Pitta & Dreier LLP is an affiliate which specializes in labor law, and Pitta, Bishop, Del Giorno & Dreier LLP specializes in government relations. In the 12 years since its founding, Dreier LLP, with its affiliate members, has grown to more than 200 attorneys, with its principal office at 499 Park Avenue in Manhattan, and additional offices in Los Angeles and Santa Monica, California; Albany, New York; and Stamford, Connecticut.

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© PRNewswire 2008
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