This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The First Marblehead Corporation Sued By Investor

Stocks in this article: FMD

SAN DIEGO and BOSTON, Sept. 4, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP announce that an investor of The First Marblehead Corporation (NYSE: FMD) ("First Marblehead") has filed a complaint in the U.S. District Court for the District of Massachusetts.  The complaint alleges that the company and certain of its officers violated the Securities Exchange Act of 1934 between November 4, 2010 and August 15, 2013 (the "Class Period").  First Marblehead is a specialty finance company that provides outsourcing services for designing and implementing private education loan programs to national and regional financial institutions and educational institutions in the United States.

(Logo:  http://photos.prnewswire.com/prnh/20130103/MM36754LOGO)

First Marblehead Accused of Making False and Misleading Statements

According to the complaint, certain First Marblehead officers made false and misleading statements and failed to disclose information regarding the company's operations and business prospects.  Specifically, the complaint alleges that, throughout the Class Period, the company and certain of its officers disseminated false and misleading statements and/or failed to disclose that the company adopted a questionable position regarding the tax implications of the sale of certain trust certificates, likely exposing the company to a large tax liability.  Further, because the company lacked adequate internal controls over financial reporting, First Marblehead failed to disclose that relevant tax guidance prohibited certain refunds and loss accruals claimed by the company.  As a result of the foregoing, First Marblehead shares traded at artificially inflated prices during the Class Period.

First Marblehead Stock Drops on News of $300 Million Tax Liability

On August 15, 2013, according to the complaint, First Marblehead issued a press release announcing the results of an ongoing Internal Revenue Service audit in connection with the sale of certain trust certificates.  According to the release, First Marblehead would incur an additional tax liability of approximately $300 million plus interest, an amount nearly twice the size of the company's market capitalization.  On this news, First Marblehead shares dropped over 36%, or $.57 per share, to close at $1.00 on August 16, 2013.

If you invested in First Marblehead and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, ddonahue@robbinsarroyo.com, or via the shareholder information form on the firm's website.

Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law.  The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.  For more information, please go to http://www.robbinsarroyo.com.

Press release link: http://www.robbinsarroyo.com/shareholders-rights-blog/first-marblehead/

Attorney Advertising. Past results do not guarantee a similar outcome.  

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs