Though Beazer Homes USA, Inc., is known primarily for designing, building, and selling homes, a new press release from Lerach, Coughlin, Stoia, Geller, Rudman & Robbins LLP law firm, says the builder not only provided mortgage originations and title insurance to home buyers, but did so neglectfully causing some of the buyers to lose their homes through foreclosure.
The firm has filed a class action lawsuit with the Northern District of Georgia on behalf of the builder’s common investors. In the suit, Beazer is accused of lacking internal controls over its lending process, causing families to default on loans, and misleading investors who bought common stock during the period of July 27, 2006 and March 27, 2007.

In a statement the plaintiffs’ law firm alleges, “Given the increased volatility in the lending market, the company had no reasonable basis to make projections about its 2007 results and as a result, the company’s 2007 projections issued during the class period were at minimum reckless. As a result of the defendants’ false statements, Beazer stock traded at artificially inflated prices during the class period, reaching a high of $48 per share in December 2006, and the company’s CEO and CFO were able to sell more than $9.7 million worth of their Beazer stock.”
The plaintiff’s law firm says Beazer investors later saw the company’s stock prices fall 9 percent in one-day and 40 percent from its class period when %{=font-style: italic;}The Charlotte Observer %released a report saying federal housing officials were considering an investigation of the builder’s business to see if they had complied with federal guidelines on how to arrange government-insured loans for buyers in subdivisions. Shortly after the news broke, Beazer’s chief financial officer resigned.
Click here to read the full release from Lerach, Coughlin, Stoia, Geller, Rudman & Robbins LLP.