Certain officers and directors at Flagstar Bancorp, Inc. are under investigation over whether they breached their fiduciary duties in connection with allegations that its Flagstar Bank, FSB violated the False Claims Act.
Investors who purchased shares of Flagstar Bancorp, Inc. (NYSE:FBC), have certain options and should contact the Shareholders Foundation at mail(at)shareholdersfoundation.com or call +1(858) 779 – 1554.
The investigation by a law firm focuses on whether certain statements of Flagstar Bancorp’s business, its prospects and its operations were materially false and misleading at the time they were made. Specifically, the investigation concerns allegations that Flagstar Bancorp’s Flagstar Bank, FSB violated the False Claims Act when it allegedly improperly endorsed federally-insured mortgage loans that eventually defaulted and allegedly falsely certified its loan underwriting practices to federal housing authorities.
On February 24, 2012, Flagstar Bancorp, Inc. (NYSE:FBC), the holding company for Flagstar Bank, FSB, announced that Flagstar Bank, FSB has entered into an agreement with the United States Department of Justice (“DOJ”) relating to certain underwriting practices associated with loans insured by the Federal Housing Administration (“FHA”) of the Department of Housing and Urban Development (“HUD”). Flagstar Bancorp, Inc. said as a result of the Agreement, Flagstar Bancorp, Inc will be revising its fourth quarter and full year 2011 financial results . However, Flagstar Bancorp, Inc said it is reaffirming the 2012 guidance it provided on its fourth quarter 2011 earnings call.
The DOJ said that that the United States has filed, and simultaneously settled, a civil fraud lawsuit against Flagstar Bank, FSB for improperly approving residential home mortgage loans for government insurance.
The DOJ said that in the settlement, Flagstar Bank, FSB admitted, acknowledged, and accepted responsibility for submitting false certifications to HUD. The false certifications induced the Federal Housing Administration (“FHA”) to accept loans for government insurance that were not eligible and that resulted in losses to HUD when the loans defaulted.
The DOJ said that Flagstar Bank, FSB agreed to pay $132.8 million to the United States in damages and penalties under the False Claims Act and to reform its business practices.
Shares of Flagstar Bancorp, Inc. (NYSE:FBC) fell from over $1.50 in April 2011 to as low as $0.47 in September 2011.
NYSE:FBC stocks closed on June 25, 2012 at $0.72 per share.
Those who purchased shares of Flagstar Bancorp, Inc. (NYSE:FBC) and currently hold those Flagstar Bancorp, Inc. (NYSE:FBC) shares, have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
3111 Camino Del Rio North – Suite 423
92108 San Diego