A class action lawsuit has been filed in the United States District Court for the District of Minnesota on behalf of purchasers of MoneyGram International, Inc. common stock during the period between January 24, 2007 and January 14, 2008 (the “Class Period”). The complaint charges MoneyGram and certain of its officers and directors with violations of the Securities Exchange Act of 1934. MoneyGram, through its subsidiaries, provides payment services in the United States, as well as through a network of retail agents in North America, Latin America, western Europe, eastern Europe, Africa, India, Asia Pacific, and the Middle East.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results related to its investments. As a result of defendants’ false statements, MoneyGram stock traded at artificially inflated prices during the Class Period, trading in the $28-$30 per share range during most of the Class Period.
On January 14, 2008, the Company announced that it had completed a valuation of its investment portfolio and had experienced additional net unrealized losses of $571 million as of September 30, 2007, bringing its cumulative net unrealized losses to $860 million. In addition, the Company announced it had needed to obtain amendments and waivers under its credit agreements. On this news, MoneyGram’s stock declined to as low as $5.66 per share before closing at $6.15 per share on January 15, 2008, on volume of 19 million shares, a one-day decline of 50%. Later, on March 25, 2008, the Company publicly disclosed that the SEC had launched an investigation into its financial statements, reporting and disclosures related to its investment portfolio.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company lacked requisite internal controls to ensure that the reserves for the Company’s investments in asset-backed securities were adequate, and, as a result, the Company’s projections and reported results issued during the Class Period were based upon defective assumptions and/or manipulated facts; and (b) the Company concealed the extent of its potential losses arising from its exposure to asset-backed securities containing uncollectible debt.
If you are a current shareholder or purchased shares during the period of January 24, 2007 and January 14, 2008 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.