Stockholder Sues After CFPB Hits Ocwen with Lawsuit

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Ocwen Financial Corporation and two chief officers are on the receiving end of a proposed class action lawsuit that claims they misled investors and artificially inflated stock prices, causing stockholders to suffer economic losses when a lawsuit eventually was filed against the loan servicer. The complaint cites various Ocwen press releases that outline the company’s success and adherence to the law, arguing that these positive results inflated the prices of the defendant’s stock. On April 20, 2017, however, the Consumer Financial Protection Bureau (CFPB) allegedly issued a press release stating that it had filed suit against Ocwen for “engag[ing] in significant and systematic misconduct at nearly every state of the mortgage servicing process.” This news caused the price of the defendant’s stock to fall 53.8%, according to the suit, causing stockholders to suffer major losses. The plaintiff argues that the company failed to disclose the truth about its alleged misconduct and thereby deceived the investing public.