LUMINENT MORTGAGE CAPITAL, INC. SECURITIES LITIGATION
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Notice of Class Action Certification, Proposed Settlement, Motion for Attorneys’ Fees and Expenses and Hearing Thereon
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     Welcome to the Luminent Mortgage Capital, Inc, Securities Litigation website.


Claims Administrator

Luminent Mortgage Capital, Inc. Securities Litigation
c/o Complete Claim Solutions, LLC
P.O. Box 24765
West Palm Beach, FL 33416
1-800-771-4781
info@LuminentSecuritiesSettlement.com 
Plaintiff’s Lead Counsel

Lowey Dannenberg Cohen & Hart, P.C.
Richard W. Cohen
Barbara J. Hart
David C. Harrison
One North Broadway, Suite 509
White Plains, NY 10601
dharrison@lowey.com 


       The following is a summary of information presented in more detail in the Notice of Class Action Certification, Proposed Settlement, Motion for Attorneys’ Fees and Expenses and Hearing Thereon (the "Notice"), which Class Members should have received in the mail, and which you can access by clicking on the box with that name to the left. Since this is just a summary, you should see the full Notice for additional details.

       Please read this information carefully. If you are a Settlement Class Member (as defined below), your rights will be affected by these proceedings and you may be entitled to receive benefits under a proposed $8.0 million class action settlement.

All Persons Who Purchased or Otherwise Acquired Publicly Traded Luminent Mortgage Capital, Inc. Securities or Call Options on Publicly Traded Luminent Securities, or Sold or Otherwise Disposed of Put Options on Publicly Traded Luminent Securities, During the Period From February 9, 2007 Through August 6, 2007, Inclusive.

 Securities Brokers and other Nominees: Please see instructions on page 8 of the Notice.


Settlement Fairness Hearing

         The Court will hold a Settlement Fairness Hearing at 9:00 am on April 29, 2009 before the Honorable Phyllis J. Hamilton, in the United States District Court for the Northern District of California, Courtroom 3, 17th Floor, United States Courthouse, 450 Golden Gate Avenue, San Francisco, California 94102, to determine:

  • (a)    Whether the proposed Settlement is fair, reasonable and adequate and should be approved by the Court;
  • (b)    Whether the proposed Plan of Allocation for distributing the Settlement to Class Members is fair and reasonable and should be approved; and
  • (c)    Whether the application by Lead Counsel for an award of attorneys’ fees and reimbursement of litigation expenses should be approved.

       The issuance of the Notice is not an expression of the Court’s opinion on the merits of any claim in the Action, and the Court still has to decide whether to approve the Settlement. If the Court approves the Settlement, payment will be made after all appeals, if any, are resolved and after the completion of all claims processing. Please be patient.


What is this case about?


       Defendant Luminent is a publicly traded real estate investment trust which invested primarily in assets secured by residential real estate mortgages. On August 6, 2007, Luminent announced that contrary to certain prior assurances about the Company’s ample liquidity and its intention to pay a dividend for the June 2007 quarter, it was suspending its dividend and was facing a liquidity crisis. Luminent’s stock price immediately dropped 85% over the next two days, closing at $0.95 on August 8, 2007, the day the dividend was supposed to have been paid. On September 5, 2008, Luminent filed for Bankruptcy protection in the United States Bankruptcy Court for the District of Maryland. 


      A Consolidated Class Action Complaint (“Complaint”) was filed on February 15, 2008 on behalf of investors in Luminent common stock and options. The Complaint alleges violations of Section 10(b) of the Securities Exchange Act and Securities Exchange Commission Rule 10b 5 against Luminent and its top executives, and violations of Section 20(a) of the Securities Exchange Act against those individual defendants.


        The Complaint alleges that defendants made misleading statements regarding Luminent’s financial condition and performance, including specifically its liquidity, the quality of its mortgage-backed securities (“MBS”) portfolio, and the safety of its dividend for the second quarter of 2007, payable August 8, 2007, which artificially inflated the market price of Luminent securities. The Complaint alleges that defendants knowingly or recklessly failed to disclose adverse facts, including margin calls on its MBS portfolio, a write-down of its portfolio and significant exposure to subprime debt, all of which negatively impacted the Company’s liquidity.


       On March 31, 2008, defendants moved to dismiss the Complaint. Lead Plaintiff filed their opposition to defendants’ motion to dismiss on June 5, 2008. Lead Plaintiff and Luminent reached an agreement to settle the case before the Court decided the motion to dismiss.


        Instead of litigating the Action through trial, Lead Plaintiff and the defendants, after arm’s length negotiations supervised by an experienced mediator, have agreed to a compromise of the claims for $8.0 million in cash to be paid by the insurance carrier for Luminent and its directors and officers (“D&O Policy”).


IMPORTANT DATES & DEADLINES
File a Proof of Claim: Postmarked not later than June 9, 2009
Request an Exclusion:    Received not later than April 9, 2009
File an Objection:    Received on or before April 9, 2009
Settlement Fairness Hearing: April 29, 2009 at 9:00 a.m. in the United States District Court for the Northern District of California


Terms of the Settlement


        The defendants, through their insurance carrier, have paid $8.0 million into an escrow account that is earning interest for the benefit of the Settlement Class. Defendants have also paid $100,000 for the costs of the notice to Class Members and for costs to administer the Settlement. The balance of this fund, after payment of court-appointed attorneys’ fees and expenses, taxes, and the costs of claims administration, including the costs of printing and mailing the Notice and the cost of publishing newspaper notice, will be divided among all Settlement Class Members who submit valid claim forms.


        The Claims Administrator shall determine each Authorized Claimant’s pro rata share of the distribution based upon each Authorized Claimant’s “Recognized Claim” from transactions on publicly traded Luminent securities during the entire Class Period. The Recognized Claim formulas, which are set forth at pages 9 – 11 of the Notice, are not intended to be an estimate of the amount that a Class Member might have been able to recover after a trial; nor is the Recognized Claim an estimate of the amount that will be paid to Authorized Claimants pursuant to the Settlement. The Recognized Claim formulas are the basis upon which the distribution will be proportionately allocated to the Authorized Claimants. (See the Plan of Allocation beginning on page 9 of the Notice for more information.


The Rights of the Settlement Class Members


      If you are a Settlement Class Member, you have the following options:


  • FILE A PROOF OF CLAIMTo qualify for a payment, you must timely send in a completed Proof of Claim form with supporting documents (DO NOT SEND ORIGINALS) to the Claims Administrator. At the link on the left, you may get a Proof of Claim form. Please read the instructions carefully, fill out the Proof of Claim form, include all the documents the form asks for, sign it, and mail it to the Claims Administrator by first class mail, postmarked not later than June 9, 2009. The Claims Administrator needs all of the information requested in the Proof of Claim in order to determine what you may be entitled to.

  • EXCLUDE YOURSELF FROM THE CLASS – You get no payment. This is the only option that might allow you to bring an individual lawsuit against the defendants asserting the legal claims being released in this case, if you have a valid and timely claim. A written request for exclusion from the Settlement Class, must be received no later than April 9, 2009, addressed to Luminent Mortgage Capital, Inc. Securities Litigation, c/o Complete Claim Solutions, LLC, P.O. Box 24765, West Palm Beach, FL 33416.
    In order to be valid, each request for exclusion must: (a) include the name, address, and telephone number of the person(s) requesting exclusion; (b) include identification of each of the person’s purchases and sales of publicly traded Luminent securities made during the Settlement Class Period, including the dates of purchase or sale, the number of shares or call options purchased and/or put options sold, and the price paid or received per security for each such purchase or sale; (c) provide proper evidence of the person’s purchases and sales of Luminent securities during the Settlement Class Period; and (d) state that the person wishes to be excluded from the Settlement Class. No request will be considered valid unless all of the information described above is included in the request. You may not exclude yourself by telephone or e-mail.

  • Unless you exclude yourself, you are a member of the Settlement Class. That means that, in exchange for your share of the settlement payment, you will give up and release any claims you might have against defendants relating to any of the claims brought by Lead Plaintiff in this Action. It also means that all of the Court’s orders will apply to you and legally bind you. If you sign the Proof of Claim and Release form, you will agree to a “Release of Claims,” attached to the Proof of Claim form, which describes exactly the legal claims that you give up if you stay in the Settlement Class.


    OBJECT – You may write to the Court if you do not like any part of it. In order for the Court to consider your objection, you must be a Settlement Class Member who does not seek to be excluded from the Class, and you must send a written statement which must be received on or before April 9, 2009, to the Court and counsel at the addresses listed on page 8 of the Notice, saying that you object to the Settlement in In re Luminent Mortgage Capital, Inc. Securities Litigation, No. C 07-04073 (PJH). The written objection may be by an informal letter or any other format. Class members do not need to hire an attorney in order to file any objections. The objection should include (a) your name, address and telephone number, your signature(s), (b) the number of shares or call options purchased and/or put options sold from February 9, 2007 through August 6, 2007, (c) the reasons you object to the Settlement, (d) copies of any papers, briefs, or other documents upon which the objection is based, and also (e) advise the Court if you intend to appear at the Settlement Fairness Hearing, and if you will be represented by counsel, the names and address of your attorneys.

Further Information

       Further information regarding the Litigation, the Notice and how to file your claim may be obtained by contacting the Claim Administrator or reading through the Notice and Proof of Claim links at the left. You may also contact Class Counsel at the address listed above.



IMPORTANT: THIS SITE IS NOT OPERATED BY LUMINENT MORTGAGE CAPITAL, INC. THIS SETTLEMENT IS SUPERVISED BY PLAINTIFF’S LEAD COUNSEL. THE ADMINISTRATOR HANDLES ALL ASPECTS OF CLAIM PROCESSING. THIS IS THE AUTHORIZED WEBSITE FOR THIS SETTTLEMENT. PLEASE DO NOT RELY UPON OTHER SITES THAT SET OUT DIFFERENT AND UNAUTHORIZED INFORMATION.