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The securities class actions were bound to come after the Standard & Poor’s 500 stock market index fell 5% last week with a significant decline at some financial services companies reeling from the subprime lending crisis. Lerach Coughlin Stoia Geller Rudman & Robbins filed a lawsuit in the U.S. District Court for the Eastern District of New York against American Home Mortgage Investment Corp., seeking class action status on behalf of investors who lost money as the real estate investment trust’s stock declined during the past year. The lawsuit alleges that company executives misled investors. Greenberg v. American Home Mortgage, No. 07-3184. The San Diego firm filed a similar lawsuit as local counsel for Chicago attorney Marvin Miller. “There are several others that have been involved in subprime declines in the last week that we’re taking a look right now,” said Samuel Rudman, an attorney with the Lerach firm in New York. Seeger Weiss of New York also said in a press release that it had sued American Home Mortgage on behalf of investors. Attorney Chris Seeger said that the firm expected to file another dozen lawsuits related to the stock drop in the next several weeks. Officials with American Home Mortgage were not available for comment. Gains vaporizing The market’s decline last week cut the Standard & Poor’s 500′s gain for the year by two-thirds and was enough to push some stocks to the point at which investor losses, coupled with alleged misrepresentations by companies, justified the litigation, attorneys allege. While securities class actions for the first half of the year were up slightly from last year at 59 filings, compared with 53 for the first half of last year, that’s still lower than the midyear average of 101 for the nine-year period of 1996 to 2005. The market’s downturn was led by the souring subprime lending market. Home owners have increasingly defaulted on home loans during the past year, creating losses for some investors who bought securities backed by the mortgages and sparking regulatory investigations of some lenders who provided the loans. Still, some attorneys say it’s premature to file lawsuits because stocks could bounce back. Bernstein Litowitz Berger & Grossmann has been analyzing a number of potential targets, including some subprime lending companies, but didn’t pull the trigger on any filings in the wake of last week’s market drop, said Salvatore Graziano, a partner at the New York firm. “You don’t want to jump in there too prematurely,” said Graziano. “We look at each of the cases very carefully.”

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