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KKR Financial Holdings LLC (NYSE: KFN) Investor Securities Class Action Lawsuit 08/07/2008

  • If you purchased shares of KKR Financial Holdings LLC (NYSE: KFN), you might have certain options and should contact the Shareholders Foundation, Inc.

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Lawsuit Overview

Case Dismissed
Company
KKR Financial Holdings LLC
Security
NYSE: KFN

Case Name
KKR Financial Holdings Shareholder Class Action Lawsuit 08/07/2008
Type of Lawsuit
Shareholder Class Action
Court of Filing
U.S. District Court for the Southern District of New York

Class Period Begin
Class Period End
Deadline To File for Lead
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Summary

November 18, 2010 - The court ordered the case dismissed and closed the case.
November 17, 2010 - The court granted the defendants' motion to dismiss.

April 27, 2009 - Defendants filed a motion to dismiss.

March 13, 2009 - The lead plaintiff filed an amended complaint.

January 27, 2009 - The lead plaintiff and lead counsel were appointed.

October 6, 2008 - Lead plaintiff motions were filed.

August 7, 2008 - An investor in shares of KKR Financial Holdings LLC (NYSE: KFN) filed a lawsuit in the U.S. District Court for the Southern District of New York against KKR Financial Holdings LLC over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff charges KKR Financial Holdings LLC and certain of its officers and directors with violations of the Securities Act of 1933. The complaint alleges that between May 4, 2007 and August 15, 2007 defendant issued materially false and misleading statements regarding KKR Financial Holdings LLC's business and financial results.

The complaint alleges that the Registration Statement was false and misleading in that it misrepresented and/or omitted material facts, including: (a) the problematic real-estate-related assets held by KKR Financial Holdings LLC were a much bigger risk to KKR Financial Holdings LLC than the Registration Statement had represented; (b) KKR Financial Holdings LLC’s capital would be insufficient given the deterioration in its portfolio which would necessitate capital preservation and the need to raise capital to the detriment of common stockholders; and (c) KKR Financial Holdings LLC was failing to adequately record loss reserves for its mortgage-related exposure, causing its balance sheet and financial results to be artificially inflated.

During May, June and most of July 2007, KKR Financial Holdings LLC’s stock traded above $25 per share. In late July, many mortgage-related companies’ stock prices declined, including KKR Financial Holdings LLC’s. Nevertheless, KKR Financial Holdings LLC’s stock closed at $18.02 per share on August 13, 2007. Then, on August 15, 2007, KKR Financial Holdings LLC issued a release which revealed that KKR Financial Holdings LLC would be selling $5.1 billion in mortgage backed securities at a loss. When this news was revealed, KKR Financial Holdings LLC’s stock price collapsed to as low as $9.39 per share, eventually closing at $10.52 per share, a decline from the prior day of 31%. KKR Financial Holdings LLC shares currently trade for approximately $10 per share, a 63% decline from the $26.90 per share at which they were sold to plaintiff and the Class.

KKR Financial Holdings LLC is a specialty finance company that invests in multiple asset classes.