Sterling investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, Sterling specializes in residential mortgages, but offers a broad suite of products and services to individuals, professionals, businesses and commercial customers. Sterling’s largest lending product was its Advantage Loan Program (“ALP”). As of September 2019, the ALP constituted more than four-fifths of its residential loan portfolio, and two-thirds of total loans. The ALP is a lower-documentation, higher-down-payment mortgage. On October 19, 2017, Sterling filed its initial registration statement on a Form S-1 with the SEC attempting to register its shares for its initial public offering (“IPO”). Sterling filed three amendments to its registration statement. Sterling filed its prospectus with the SEC on a Form 424B4 on November 17, 2017. That same day, Sterling commenced its IPO through which fifteen million shares of common stock were offered at a price of $12.00 per share.
The complaint alleges that, on June 21, 2019, after the market closed, Sterling filed a Form 8-K revealing that it had entered into an agreement with the Office of the Comptroller of the Currency to enhance its anti-money laundering and Bank Secrecy Act compliance. However, Sterling attempted to temper this news, stating that, inter alia, it did not believe that the agreement would have any material impact on its performance metrics. That same day, Sterling filed another Form 8-K announcing that director Jon Fox (“Fox”) was resigning from the Board of Directors. Fox had served as a director since 1997 and was a member of the Audit and Risk Management Committee. Again, Sterling attempted to temper the news, stating, that “Fox’s retirement and resignation was not due to any disagreement on any matter relating to the Company’s operations, policies or practices.”
Then, on December 9, 2019, Sterling filed a Form 8-K revealing it was suspending the ALP due to an internal review of documentation on past loans. Following this news, Sterling shares fell from a close of $9.45 on December 6, 2019 to a close of $7.29 on December 9, 2019, a decline of 22.86%.
On March 6, 2020, Sterling filed a Form 8-K disclosing the preliminary results of the investigation of its Special Committee, which found that Sterling’s employees engaged in misconduct in connection with its loan origination process, including its income verification and documentation practices. Sterling announced it was shutting down the ALP and that it has received a grand jury subpoenas from the U.S. Department of Justice relating to its residential lending practices. Following this news, Sterling’s shares declined from $6.67 on March 6, 2020 to a close of $4.88 on March 9, 2020, a decline of 26.84%.
Finally, on March 17, 2020, Sterling notified the SEC that it would delay the filing of its Annual Report to complete additional review of its processes and an ongoing internal review by the Special Committee. Following this news, the price of Sterling shares declined from a close of $4.54 on March 17, 2020 to a close of $2.94 on March 18, 2020, a decline of 35%.
The complaint alleges that during the Class Period and in connection with Sterling’s IPO, defendants made untrue statements and omitted material facts and failed to disclose material facts concerning, inter alia, Sterling’s loan underwriting, risk management and internal controls, including repeatedly touting its strict underwriting, asset quality and the ALP.
If you are a member of the class described above, you may no later than April 27, 2020 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. Returning the attached form or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her 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 1-844-887-9500 or 1-610-667-7706, or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
CONTACT:
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-844-887-9500 (toll free) or 1-610-667-7706
Or by e-mail at info@ktmc.com