MURRAY, FRANK & SAILER LLP Files Class Action Lawsuit Against MRU Holdings, Inc.
NEW YORK, NY -- MURRAY, FRANK & SAILER LLP has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of investors who purchased shares of MRU Holdings, Inc. ("MRU" or the "Company") (OTC:UNCLQ; formerly NASDAQ:UNCL) during the period between July 9, 2007 and September 19, 2008, inclusive (the "Class Period").
The complaint charges MRU and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges, among other things, that the defendants' public statements failed to disclose, among other things, that: (1) the market for Auction Rate Securities ("ARS"), which the Company issued in its first student loan securitization, was illiquid and existed at the whim of the broker-dealers; (2) the illusion of liquidity created by the broker-dealers allowed the Company to securitize its student loans on favorable terms; (3) that once the true nature of the ARS market became known, the terms of future securitizations by the Company would not be favorable to the Company; and (4) that without the favorable terms available in the ARS market as a result of manipulation by the broker-dealers, the Company would not have sufficient capital to originate loans, making the Company's business model untenable.
On July 7, 2008, the Company revealed the unfavorable terms of its second securitization, causing the price of its securities to drop to $2.27 per share - a one day decline of $0.23 per share, or 9.2%. Then, on August 18, 2008, Moody's Investors Service placed the ARSs issued by MRU on review for downgrade, driving the price of MRU shares even further, to $1.05 per share. After the market closed on September 5, 2008, the Company ceased originating student loans, which caused MRU's stock price to fall even further, closing on September 6, 2008 at $0.71. Finally, on February 9, 2009, MRU announced that it had filed a voluntary petition for bankruptcy. The Company's shares have been delisted from the NASDAQ stock exchange, and currently trade at less than $.01 per share.
If you are a member of the proposed Class, you may move the court no later than June 19, 2009, to serve as a Lead Plaintiff for the Class. A Lead Plaintiff is a representative chosen by the Court, who acts on behalf of other class members in directing the litigation.
If you would like to discuss this action, this announcement, or your rights and interests, please contact us.
CONTACT: MURRAY, FRANK & SAILER LLP