Home Loan Servicing Solutions, Ltd.
Home Loan Servicing Solutions acquires mortgage servicing assets and engages Ocwen Financial Corporation (NYSE:OCN) to service the mortgage loans underlying such assets. According to the lawsuit, the Company made false and/or misleading statements and/or failed to disclose that: (i) the Company's business was dependent on Ocwen and Ocwen conducting its business legally; (ii) the Company's business faced material risks and uncertainties due to the systemic internal control weaknesses at Ocwen; (iii) Ocwen was under investigation for violating applicable federal and state regulations and laws, including among other things, the New York Department of Financial Services' and the state of California's investigation of Ocwen; (iv) the Company was in breach of provisions of its notes held by BlueMountain Capital Management, LLC; and (v) the Company faced material risks if it defaults on its notes. The suit claims that when the truth was revealed, it caused the price of the Company's stock to drop, damaging investors.
Plaintiffs filed an Amended Complaint on July 17, 2015. On June 6, 2016, the Court issued an Order denying Defendants’ motions to dismiss in part. After extensive discovery, the parties reached a proposed settlement of $6 million, which was preliminarily approved by the Court on June 15, 2017. At the final settlement hearing which was held on November 17, 2017, the Court found the settlement to be fair, reasonable and adequate.