WisBusiness: Law firm sues MGIC


Ademi & O’Reilly LLP, a Cudahy law firm that focuses on class action law suits dealing with securities, has filed a class action suit against mortgage insurer MGIC Investment Corp.

The suit alleges the Milwaukee-based company’s leadership team violated terms of the Securities Exchange Act of 1934 by issuing a series of misrepresentations to the market that led the artificial inflation of the company’s stock price.

In February, MGIC reported a $1.5 billion fourth-quarter loss and a net loss of $1.67 billion for 2007. In April, Standard & Poor’s downgraded the company from AA- to A with a negative outlook, a move that affected MGIC’s status with Freddie Mac and Fannie Mae, government-established corporations that buy mortgage loans.

In a recent interview, MGIC CEO Craig Culver said the company’s business fundamentals are sound. He also said that while the company’s capital position has improved through the completion of a stock offering and debenture sale in March that raised $848 million, S&P wants to see a return to profitability extending over two years before reviewing the company’s debt ratings.

Investors who bought MGIC stock between Feb. 6, 2007, and Feb. 12, 2008, may be eligible to join the class action suit. For additional information, call (866) 264-3995.