Kramer Levin Wins Eleventh Circuit Appeal of Dismissal of Securities Fraud Class Action Against Mortgage Servicer Ocwen

On Aug. 15, 2019, Kramer Levin achieved another win for its client Ocwen Financial Corporation when the Eleventh Circuit Court of Appeals affirmed the District Court’s dismissal with prejudice of a securities fraud class action against Ocwen. The putative class action lawsuit, brought by shareholder University of Puerto Rico Retirement System, alleged that Ocwen’s shareholders were damaged when the company’s stock price dropped following announcements concerning regulatory measures taken against Ocwen. The District Court had ruled that none of the alleged misstatements were actionable under the federal securities fraud statutes, as those statements were either puffery, statements of opinion, forward-looking statements, statements concerning mismanagement, or statements not properly alleged to have been false. The Eleventh Circuit Court of Appeals affirmed that ruling, concluding that “none of Ocwen’s statements rises to the level of an actionable misrepresentation of materials fact.” The Court went on to conclude that some of the Ocwen statements at issue “are immaterial puffery, some are mere statements of opinion, some fall within the PSLRA’s safe-harbor for forward-looking statements, and still others are simply not alleged to be false. Additionally . . . nothing that Ocwen failed to disclose rendered already-disclosed information misleading in context.”

“We are pleased that the Eleventh Circuit Court of Appeals has today confirmed that Ocwen has not misled investors,” Kramer Levin stated, “and has affirmed the dismissal of this lawsuit without leave to file an amended complaint. We also welcome the Court’s rejection of the plaintiff’s efforts to expand the scope of corporate liability under the Nation’s securities laws.”  

The decision was reported in Aug. 15, 2019, Bloomberg and Law360 articles.