This is a securities class action lawsuit against First Marblehead and a number of individual defendants .
The class action complaint alleges that First Marblehead made materially false and misleading statements about the performance and quality of First Marblehead's securitizations in SEC filings and other statements to the investing public. Among other things, First Marblehead misrepresented the level of default rates in its portfolio and the default rates' effect on First Marblehead's ability to securitize additional student loan underwritings. The complaint also states that First Marblehead recklessly disregarded that its student loan guarantor, The Education Resources Institute, was under-reserved and unable to adequately insure student loans underwritten by First Marblehead. The guarantor filed for bankruptcy protection on April 7, 2008.
Name (Stock Symbol)
First MarbleHead Corporation (FMD)
The First Marblehead Corporation, together with its subsidiaries, provides outsourcing services for private education lending in the United States. It offers program design, marketing, application processing, underwriting, loan documentation and disbursement, technical support, customer support, and facilitation of loan securitization services, as well as stand-alone loan origination services and portfolio management services on a fee-for-service basis.
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