In Re: PMI Group Inc. Security Litigation (D.California, November 2, 2009)
Judge Susan Illston of the U.S. District Court for the Northern District of California on Monday, November 2, 2009, denied the insurer’s request to dismiss a proposed securities class action against mortgage insurer PMI Group Inc. Judge Illston found that the investors’ amended complaint cured the deficiencies outlined in a previous order dismissing parts of the lawsuit.
The lawsuit was filed in April 2008 and accused the insurer of concealing the company’s exposure to home loan defaults and failing to engage in proper underwriting practices. Judge Illston had dismissed parts of the original complaint finding that plaintiffs failed to allege a strong inference of scienter. However, the new complaint clarified the scienter element. The proposed class would include shareholders who bought PMI stock.
A copy of the Order is available here. A copy of the complaint is available here.
By Sarah Fang and Joanna Roberto