Case Update - 04/13/2009
Philadelphia federal district court judge Mary McLaughlin dismissed the case against Radian and three current and former officers of the company.

Judge McLaughlin found that the plaintiffs have not met their burden under the PSLRA of alleging a strong inference of scienter. He wrote that the “defendants have offered plausible nonculpable explanations for, among other things, the timing of the C-BASS write-down, the stock sales made by the defendants, and Deloitte’s decision not to stand for reappointment. These explanations are consistent with the documents of public record of which the Court has taken notice, and are more compelling than the alternative explanations offered by the plaintiffs.” Judge McLaughlin concludes that the plaintiffs' inference of scienter is neither cogent, nor compelling, nor strong in light of competing inferences, and a resonable person would not deem the inference of scienter cogent and at least as compelling as nonculpable inference .

Original Post - 11/25/2008

<p align= justify >According to a press release dated August 15, 2007, the complaint charges Radian and certain of its officers and directors with violations of the Exchange Act. Radian operates, through its subsidiaries and affiliates, as a credit enhancement company that provides credit protection products and financial services to mortgage lenders and other financial institutions. One of Radian’s principal affiliates is Credit-Based Asset Servicing and Securitization, known as C-BASS. C-BASS is an investor in the credit risk of subprime single-family residential mortgages. Specifically, the complaint alleges that, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose: (i) that the Company’s $468 million investment in C-BASS was materially impaired as C-BASS was experiencing increasing margin calls and C-BASS’s investments were declining in value at a significant rate; (ii) that the Company was materially overstating its financial results by failing to properly value its investment in C-BASS and by failing to write-down that investment in a timely fashion; and (iii) as a result of the foregoing, the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) and, therefore, were materially false and misleading.</p>
<p align= justify >The complaint further alleges that on July 30, 2007, after the market closed, Radian issued a press release announcing that “it has concluded that the value of its investment in” C-BASS has been “materially impaired.” The Company further disclosed that its investment in C-BASS consists of approximately $468 million of equity as of June 30, 2007 and an additional $50 million drawn on July 20 and 23, 2007 under a $50 million unsecured credit facility that Radian provides to C-BASS. The Company also represented that although it had not determined the level of the impairment charge it “could be Radian’s entire investment, less any associated tax benefit.” In response to this announcement, the price of Radian common stock declined from $40.20 per share to $33.71 per share on extremely heavy trading volume.</p>
<p align= justify >Then, on July 31, 2007, before the market opened, C-BASS issued a press release concerning Radian’s announcement of the impairment charge. According to C-BASS, at the beginning of 2007, it had $302 million of liquidity, representing more than 30% of its capital of $926 million. Thereafter, as 2007 unfolded and the subprime mortgage market crisis deepened, C-BASS received and met $290 million in margin calls from its lenders, leaving it with virtually no liquidity. However, the margin calls kept coming into C-BASS and C-BASS did not have the liquidity to meet them. In response to this announcement, the price of Radian stock declined from $33.71 per share to $27.51 per share on extremely heavy trading volume.</p>