According to the complaint, Ambac is a holding company whose subsidiaries provide financial guarantee products and other financial services to clients in both the public and private sectors around the world. The company operates in two segments: financial guarantee and financial services. The primary type of financial guarantee product that Ambac provides, monoline insurance, guarantees the timely repayment of bond principal and interest when a bond issuer defaults. In its capacity as a provider of monoline insurance, Ambac insures approximately $2.5 billion in debt issued by the Commonwealth of Puerto Rico.
The complaint alleges that throughout the Class Period, the defendants issued materially false and misleading statements regarding the company’s business, operational and legal practices. Specifically, the complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose that: (i) given the deterioration and increased volatility in the company’s bond portfolio, including its Puerto Rican bonds, the company had far greater losses and loss exposure to anticipated defaults than it had previously disclosed; (ii) the company’s credit risk surveillance strategies were inadequate; (iii) the company was failing to implement mitigation strategies in a timely manner to stabilize the residual value of its financial guarantee business; (iv) as a result of the foregoing, the company’s financial condition was much worse than represented; and (v) Ambac failed to maintain adequate internal controls over financial reporting.
The Class Period commences on November 13, 2013, when Ambac issued a press release entitled “Ambac Financial Group, Inc. Announces Third Quarter 2013 Results” (the “November 13 Press Release”). According to the complaint, the November 13 Press Release falsely reported a net benefit for Loss and loss expenses for the third quarter 2015 of $154.3 million.
The complaint alleges that on June 29, 2015, Puerto Rico’s governor announced that the island’s more than $70 billion in debt was “not payable” and Puerto Rico would likely default on upcoming interest payments. The governor’s announcement made Ambac’s true exposure immeasurably apparent: the company was now potentially liable for up to $2.5 billion of the Commonwealth’s debt it insures. Following this news Ambac’s stock price fell roughly 29 percent, from a closing price of $22.38 per share on June 26, 2015, to a closing price of $15.91 per share on July 1, 2015.
If you are a member of the class described above, you may no later than August 29, 2016 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@ktmc.com. For more information about Kessler Topaz Meltzer & Check, LLP, please visit our website at http://www.ktmc.com.
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Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087 1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at info@ktmc.com