On January 30, 2015, Lead Plaintiff International Union of Painters and Allied Trades District Council 35 Pension and Annuity Funds filed the Amended Class Action Complaint (“Amended Complaint”). The Amended Complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by misrepresenting the true nature of the companies’ relationship and business dealings, loan servicing capabilities and legal compliance. Throughout the Class Period, Defendants emphasized to the market that Altisource’s revenues from its related party transactions with Ocwen—Altisource’s lifeblood—were sustainable, free of self-dealing or other conflicts, and subject to strict internal controls. These assurances extended to related party transactions and potential conflicts of interests involving Defendant Erbey, the founder, majority shareholder, and Chairman of both companies until government regulators recently forced him to resign. In addition, the action alleges that Defendants touted the superior quality and regulatory compliance of Altisource’s mortgage servicing technologies. Defendants repeatedly emphasized that Altisource’s REALServicing platform, the technology backbone of Ocwen’s loan servicing business, was highly scalable and fully capable of servicing loans in an efficient, effective, and legally compliant manner.
On March 23, 2015, Defendants filed their motions to dismiss Plaintiffs’ Amended Complaint. Plaintiffs filed briefs in opposition to Defendants’ motions on May 14, 2015. The Ocwen Defendants filed their reply in further support of their motion to dismiss on June 8, 2015. The Altisource Defendants filed their respective reply on June 15, 2015. On December 22, 2015, Judge William P. Dimitrouleas of the Southern District of Florida denied the Altisource Defendants’ motion to dismiss in part. The Court dismissed all claims against Ocwen.
The Altisource Defendants thereafter moved for reconsideration of the Court’s Motion to Dismiss Order, including on the basis of “new evidence” from a just-filed SEC proceeding concerning Ocwen. The Court denied Defendants’ motion on March 4, 2016.
The Parties thereafter commenced discovery efforts while also engaging in motion practice and other activities as required by the Court’s scheduling orders. On December 2, 2016, pursuant to Plaintiffs’ motion to amend, Plaintiffs submitted a Fourth Amended Complaint based on fact development through discovery. After the Court granted Plaintiffs’ motion to amend, Plaintiffs filed the Fourth Amended Complaint on December 28, 2016.
On January 19, 2017, the Parties filed a Notice of Settlement informing the Court that the Parties had agreed to settle all claims asserted against Defendants. On February 8, 2017, Plaintiffs filed a motion for preliminary approval of the settlement, along with the Stipulation of Settlement and other exhibits, which informed investors that the Parties agreed to settle all claims for $32 million.
On February 10, 2017, the Court granted preliminary approval of the settlement. Among other things, the Court’s Order directed that Notice of the proposed settlement be provided to potential class members. A settlement fairness hearing will be held on May 30, 2017 at 1:15 p.m. in Courtroom 205B of the U.S. Federal Building and Courthouse, 299 East Broward Boulevard, Fort Lauderdale, Florida 33301. The deadline for submission of claims is July 11, 2017. Additional information concerning this settlement can be found at http://www.altisourcesecuritieslitigation.com/.