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AppraiserLoft Blog I Appraisal Industry News |
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Recent PostsBlogroll« AppraiserLoft.com, a Nationwide Appraisal with Proprietary Technology that Allows the Fastest Turnaround Times for Real Estate Appraisals. | Home | AVMs in Declining Markets » Law firms investigate First AmericanBy Aman Makkar | December 6, 2007 Two weeks ago, The First American Corp. was sued in New York for allegedly colluding with Washington Mutual to inflate appraisals. Now, four law firms are investigating the company for potential violations of the Employee Retirement Income Security Act of 1974 (ERISA).The investigation focuses on investments in First American stock by the First American Corp. 401(K) Savings Plan. The four firms pursuing possible litigation include Milberg Weiss LLP, Keller Rohrback LLC, Kahn Gauthier Swick LLC and Brower Piven. In response to the investigations, First American issued a statement to The Title Report that said it “believes the plan has been appropriately administered.†The law firms said a breach may have occurred if the fiduciaries failed to manage the assets of the plan prudently and loyally by investing the assets in company stock when it was no longer a prudent investment for participants’ retirement savings. Kahn Gauthier Swick said First American employees’ 401(K) accounts may have been weighted too heavily with First American stock. “These accounts may have been overly invested in First American stock during the time First American shares declined significantly in value, thereby resulting in excessive losses for First American employees,†the law firm alleged. Lawsuits over company 401(k) plans are a common tactic of firms such as Milberg Weiss, which sue companies after big drops in their stock or other problems. The investigation relates to certain facts alleged in the lawsuit field Nov. 1 by New York Attorney General Andrew Cuomo against First American and its subsidiary, eAppraiseIT. The suit alleges that First American violated federal and state laws by conspiring with Washington Mutual to inflate real estate appraisals. “Disturbingly, evidence collected by the attorney general, including internal e-mails, are alleged to show that eAppraiseIT executives knew that their scheme was illegal,†Milberg said in a statement. First American has vehemently denied the charges, saying the attorney general’s allegations are based on a handful of e-mails that were taken out of context and mischaracterized and provided an incomplete review of the facts. “The program called into question today by the attorney general has been vetted and approved by the federal regulator responsible for oversight of such programs,†First American said. “We welcome the opportunity to now present all the facts before an impartial third party. In that presentation, we will demonstrate the appropriateness of our appraisal practices in the state of New York and we will vigorously defend the reputation of Washington Mutual and the reputation we have labored more than 100 years to build.†Cuomo’s lawsuit did not target Washington Mutual, however, the largest U.S. thrift, was sued last week by investors claiming the bank sought to inflate real-estate appraisals. New York-based law firm Wolf Popper and San Diego-based Coughlin Stoia Geller Rudman & Robbins said in statements they had filed lawsuits alleging WaMu’s results were boosted by such alleged practices. Topics: Lawsuits | No Comments » CommentsYou must be logged in to post a comment. |
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