INSTITUTIONAL INVESTOR SEEKS RECOVERY FROM MONEYGRAM OVER INVESTMENT LOSSES
MINNEAPOLIS, MN – A public pension fund filed a lawsuit today against MoneyGram International,
Inc. for potential violations of the Securities Exchange Act of 1934. The lawsuit filing follows issuance
of a Company press release on January 14, 2008, announcing that the Company had cumulative net
unrealized losses of $860 million due, in part, to heavy investments in asset-backed securities. On this
news, MoneyGram’s stock declined to $6.15 per share, representing a one-day decline of 50%. The
pension fund’s concerns were affirmed on March 25, 2008, when the Securities & Exchange
Commission (SEC) announced its investigation into MoneyGram’s financial statements, reporting and
disclosures related to its investment portfolio.
The lawsuit alleges that MoneyGram, through its Officers, issued false and misleading statements to its
investors about the extent of its investments in asset-backed securities and the extent of its potential
losses arising from exposure to asset-backed securities containing uncollectible debt. The Complaint
alleges that the Company not only made reckless and unsustainable investments in mortgage-back
securities but concealed the extent of its exposure. Further, the investors allege the Company lacked the
requisite internal controls to ensure that the reserves for the Company’s investments in asset-backed
securities were adequate.
According to Zimmerman Reed attorney Carolyn Anderson, who represents the pension fund, “Real
individuals lost real life savings here. Shareholders have every right to demand accountability where
companies conceal material information from the public.”
The pension fund’s lawsuit was filed in the United States District Court for the District of Minnesota, as
a class action on behalf of purchasers of MoneyGram common stock during the period between January
24, 2007 and January 14, 2008.
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