After nearly eight years of litigation, it looks as if a Panel of the Ninth Circuit has put an end to the Imperial Credit Industries ("ICII") securities class action, perhaps for good. In evaluating a summary judgment ruling from the Central District of California in favor of ICII’s executives and auditor KPMG, the Panel, consisting of Ninth Circuit Judges Kim McLane Wardlaw and Marsha S. Berzon, along with Senior District Judge James M. Fitzgerald (D. Alaska), has affirmed the case-ending ruling. The problem? Well, you see, "the gravamen of plaintiffs' claims is that ICII's public filings during the class period fraudulently inflated the value of ICII's securities by inflating the value of its 46.9% equity holdings in Southern Pacific Funding Corporation ("SPFC")." But, the Panel noted that "the plaintiffs failed to provide evidence that SPFC's residuals, were, in fact, overvalued at any point in time during the class period," because they "failed to introduce the testimony of a qualified residuals valuation expert, or any other proof of an actionable misrepresentation or transaction or loss causation."
You can read Mortensen v. Imperial Credit (issued as unpublished on August 17, 2005) at 2005 U.S. App. LEXIS 17790.
Nugget: "The district court correctly concluded that the Moore Report and Marek Report, the only expert reports submitted by plaintiffs, failed to qualify as proper expert testimony on this subject."