A lawsuit filed yesterday in San Diego federal court accuses San Diego-based subprime lender Accredited Home Lenders of artificially inflating its stock price.
The suit, which seeks class-action status, claims that over a 16-month period Accredited misrepresented its operations, financial performance and future prospects. The suit would represent investors who bought Accredited stock between Nov. 1, 2005, and March 12 of this year.
The suit says the first inkling of the company's misrepresentations came on Feb. 14, when Accredited issued a news release announcing disappointing profitability. On March 12, Accredited reported that it had paid $190 million in margin calls on its facilities since Jan. 1, according to the lawsuit. The next day, the stock dropped 65 percent to $3.97 per share on the Nasdaq. The stock closed yesterday at $9.93, down 4 cents.
The suit was filed by Charles H. Johnson & Associates, a Minneapolis law firm. Calls late yesterday afternoon to both the law firm and Accredited were not returned.
Court records show that three other shareholder suits have been filed against Accredited since March 16.
