ATLANTA, Aug. 18, 2014 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of Ocwen Financial Corporation (NYSE: OCN) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of Florida. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between May 2, 2013 and August 11, 2014 (the "Class Period"). Ocwen provides residential and commercial mortgage loan origination and services in the United States and internationally, and asset management services to owners of mortgage loans and foreclosed real estate.
Ocwen Is Accused of Charging $65 Million in Questionable Fees to Homeowners
According to the complaint, shares of Ocwen dropped an aggregate of 55%, from closing at $56.00 on December 18, 2013 to closing at $25.16 on August 12, 2014, due to the slow revelation of the nature of Ocwen's operations. On December 19, 2013, a New York Times article announced a $2.2 billion settlement entered into by Ocwen with the Consumer Financial Protection Bureau related to violations by the company in "every stage of the mortgage servicing process." Following this announcement, on February 26, 2014, Bloomberg published an article revealing that the New York Department of Financial Services issued a letter to the company expressing their concerns with Ocwen's business transactions with affiliated companies. On August 4, 2014, a second letter was issued notifying the company that the New York Department of Financial Services was reviewing an arrangement with related company Altisource Portfolio Solutions, S.A., and questioning the involvement of the officers and directors, specifically Chairman William C. Erbey, in approving transactions with Altisource relating to the forced placed insurance that funneled $65 million in fees from distressed homeowners. On August 12, 2014, Ocwen disclosed additional issues when announcing that transactions with another affiliated company would lead to the restatement of financial results for the fiscal year ended December 31, 2013, as well as the first quarter of 2014.
The complaint further alleges that Ocwen made false and/or misleading statements and failed to disclose that: (i) Altisource was charging exorbitant fees to Ocwen to aid in funneling as much as $65 million in questionable fees; (ii) defendant Erbey was involved in approving transactions with which he had a conflict of interest; (iii) the company failed to comply with laws and regulations designed to protect homeowners; (iv) the company lacked adequate internal and financial controls; and (vi) the company's financial statements were artificially inflated and did not present a fair representation of the company's finances or operations.
Ocwen Investors Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo LLP
If you invested in Ocwen and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the information form on the firm's shareholder rights blog: www.robbinsarroyo.com/shareholders-rights-blog/ocwen-financial-corporation.
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.
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SOURCE Robbins Arroyo LLP