Sheldon Pittleman, et al. v. Impac Mortgage Holdings, …securities.stanford.edu/filings-documents/1038/IMH_01/...OTTIER S1'AIUTES CQNCRI^CT T 1 T5 jOk! f'R15019FIt-• I A1SC9R•

UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA

NOTICE OF ASSIGNMENT TO UNITED STATES MAGISTRATE JUDGE FOR DISCOVERY

This case has been assigned to District Judge Andrew Guilford and the assigneddiscovery Magistrate Judge is Marc Goldman.

The case number on all documents filed with the Court should read as follows:

SACV07- 970 AG (MLGx)

Pursuant to General Order 05-07 of the United States District Court for the CentralDistrict of California, the Magistrate Judge has been designated to hear discovery related

motions.

All discovery related motions should be noticed on the calendar of the Magistrate Judge

NOTICE TO COUNSEL

A copy of this notice must be served with the summons and complaint on all defendants (if a removal action isriled, a copy of this notice must be served on all plaintiffs).

Subsequent documents must be filed at the following location:

U Western Division [XI Southern Division U Eastern Division312 N. Spring St., Rm. G-8 411 West Fourth St ., Rm. 1-053 3470 Twelfth St., Rm. 134Los Angeles, CA 90012 Santa Ana, CA 92701 -4516 Riverside , CA 92501

Failure to file at the proper location will result in your documents being returned to you.

CV-18 (03106) NOTICE OF ASSIGNMENT TO UNITED STATES MAGISTRATE JUDGE FOR DISCOVERY

Lionel Z. Glancy (SBN 134180)

GLANCY BINKOW & GOLDBERG LLP

1801 Ave. of the Stars, Suite 311

Los Angeles, California 90067

Telephone: 310-201-9150 Facsimile: 310-201-9160

Email: [email protected]

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SHELDON PITTLEMAN, on behalf of himself and CASE NUMBER

all others similarly situated ,PLAINTIFF(S)

V.

IMPAC MORTGAGE HOLDINGS, INC., JOSPEH

R. TOMKINSON, WILLIAM S. ASHMORE,

RICHARD J. JOHNSON and GRETCHEN D.

VERDUGO,DEFENDANT(S).

SACV07-970 AG

SUMMONS

TO: THE ABOVE-NAMED DEFENDANT(S):

YOU ARE HEREBY SUMMONED and required to file with this court and serve upon plaintiff' s attorney

Lionel Z . Glancy , whose address is:


1801 Ave. of the Stars , Suite 311

Los Angeles , California 90067

Telephone : 310-201-9150 Facsimile : 310-201-9160

Email : [email protected]

an answer to the IN complaint q amended complaint q counterclaim q cross-claim

which is herewith served upon you within 20 days after service of this Summons upon you, exclusive

of the day of service. If you fail to do so, judgement by default will be taken against you for the relief

demanded in the complaint.

Dated:AUG 1; 7 2007.

CV-OIA (01/01) SUMMONS

fPlr,IlIAM

Lionel Z. Glancy (SBN 134180)


1801 Ave. of the Stars , Suite 311

Los Angeles, California 90067

Telephone: 310-201-9150 Facsimile: 310-201-9160


UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SHELDON PITTLEMAN, on behalf of himself and CASE NUMBER

all others similarly situated,PLAINTIFF(S)

IMPAC MORTGAGE HOLDINGS, INC., JOSPEH

R. TOMKINSON, WILLIAM S. ASHMORE,

RICHARD J. JOHNSON and GRETCHEN D.

VERDUGO,DEFENDANT(S).

TO: THE ABOVE-NAMED DEFENDANT(S)-

YOU ARE HEREBY SUMMONED and required to file with this court and serve upon plaintiff" s attorneyLionel Z. Glancy . whose address is:


1801 Ave . of the Stars, Suite 311

Los Angeles , California 90067



an answer to the IN complaint q amended complaint q counterclaim q cross-claim

which is herewith served upon you within 20 days after service of this Summons upon you, exclusive

of the day of service. If you fail to do so, judgement by default will be taken against you for the relief

demanded in the complaint.

Clerk, U.S. Distrcict:Copjt.r>

y:Dated : (yI 10 1 7 ZOOf B

(S2^ urt},

1144

CV-01A (01/01) SUMMONS rnrv

SACV07-970 AG (MLGx)

SUMMONS

UNITED STA DISTRICT COURT, CENTRAL DISTRICI ,f CALIFORNIACIVIL COVER SHEET

I (a) PLAINTIFFS (Check box i ^f you are representing yourself

SHELDON PITTLEMAN

(b) County of Residence of First Listed Plaintiff (Except in U.S. Plaintiff Cases);

Broward County, Florida

DEFENDANTSIMPAC MORTGAGE HOLDINGS, INC., JOSPEH R.TOMKINSON, WILLIAM S. ASHMORE, RICHARD J. JOHNSONand GRETCHEN D, VERDUGO,

County of Residence of First Listed Defendant (In U.S. Plaintiff Cases Only):

(c) Attorneys (Firm Name, Address and Telephone Number . If you are representing Attorneys (If Known)

yourself, provide same.)

Lionel Z . Glancy (SBN 134180)


1801 Ave . of the Stars , Suite 311 , Los Angeles, California 90067


II. BASIS OF JURISDICTION (Place an X in one box only.) III. CITIZENSHIP OF PRINCIPAL PARTIES - For Diversity Cases Only

(Place an X in one box for plaintiff and one for defendant.)

q I U.S. Goventment Plaintiff t'3 Federal Question (U.S PTF DEF PTF DEF

Government Not a Party) Citizen of This State q I q I Incorporated or Principal Place 04 q 4of Business in this State

q 2 U.S. Government Defendant q 4 Diversity (Indicate Citizenship Citizen of Another State q 2 L7 2 Incorporated and Principal Place q 5 q 5.

of parties in Item 1II) of Business in Another State

Citizen or Subject of a Forei gn Country q 3 q 3 Foreign Nation 0 6 q 6

IV. ORIGIN (Place an X in one box only.)

V1 Original q 2 Removed from q 3 Remanded from q 4 Reinstated or q 5 Transferred from another district (specify): q 6 Multi- q 7 Appeal to District

Proceeding State Court Appellate Court Reopened District Judge fromLitigation Magistrate Judge

V. REQUESTED IN COMPLAINT: JURY DEMAND: lMYes q No (Check 'Yes' only if demanded in complaint.)

CLASS ACTION under F.R.C.P. 23: IB'Ycs q No q MONEY DEMANDED IN COMPLAINT: S 0

VI. CAUSE OF ACTION (Cite the U.S. Civil Statute under which you are filing and write a brief statement of cause. Do not cite jurisdictional statutes unless diversity.)

Violation of Section I0(b) of The Exchange Act And Rule I Ob-5 Promulgated Thereunder,Violation of Section 20(a) of the Exchange Act,

VII. NATURE OF SUIT (Place an X in one box only.)

OTTIER S1'AIUTES CQNCRI^CT T 1 T5 jOk! f'R15019FIt-• I A1SC9R•.

q 400 State Reapportionment [1 310 Insurance PERSONAL INJURY PERSONAL -ETO'3O$IS q 710 Fair Labor Standards

q 410 Antitrust q 1 20 Marine q 310 Airplane PROPERTY q 510 Motions to Act

q 430 Banks and Banking q 130 Miller Act q 315 Airplane Product q 370 Other Fraud Vacate Sentence q 720 Labor/Mgmt.

q 450 Commerce/ICC q 140 Negotiable Instrument Liability q 371 Truth in Lending Habeas Corpus Relations

Rates/etc . q 150 Recovery of q 320 Assault , Libel & q 380 Other Personal q 530 General q 730 Labor/Mgmt.

q 460 Deportation Overpayment & Slander Property Damage q 535 Death Penalty Reporting &

q 470 Racketeer Influenced Enforcement of q 330 Fed. Employers ' q 385 Property Damage q 540 Mandamus/ Disclosure Act

and Corrupt Judgment Liability Product Liability Other q 740 Railway Labor Act

Organizations q 151 Medicare Act q 340 Marine q 550 Civil Rights q 790 Other Labor

q 480 Consumer Credit q 152 Recovery of Defaulted q 345 Marine Product q 422 Appeal 28 USC q 555 Prison Condition Litigation

q 490 Cable/Sat TV Student Loan (Excl. Liability 158 11') f ^, ,QR^ q 791 Empt. Ret. Inc.

q 810 Selective Service Veterans ) q 350 Motor Vehicle q 423 Withdrawal 28 pLN} ;' -^ Security Act

850 Securities/Commodities q 153 Recovery of q 355 Motor Vehicle USC 157 'LD (.StU Agriculture PRgP', 'l( C21'r;1T.lti

(Exchange Overpayment of Product Liability ?IVI1GIIT9 "°` q o20 Other Food & q 820 Copyrights

0 875 Customer Challenge 12 Veteran ' s Benefits q 360 Other Personal l_l 441 Voting Drug q 830 Patent

USC 3410 q 160 Stockholders ' Suits Iniury q 442 Employment q 625 Drug Related q 840 Trademark

q 890 Other Statutory Actions q 190 Other Contract q 362 Personal Injury- q 443 Housing/Acco- Seizure of SOCIAL SI CURI`TY

Cl 891 Agricultural Act q 195 Contract Product Med Malpractice mmodations Property 21 USC q 861 HIA ( 1395ff)

q 892 Economic Stabilization Liability q 365 Personal Injury- q 444 Welfare 881 q 862 Black Lung (923)

Act Cl 196 Franchise Product Liability q 445 American with q 630 Liquor Laws q 863 DIWC/DIWW

q 893 Environmental Matters REAL: PR I RTY q 368 Asbestos Personal Disabilities - El 640 R . R. & Truck (405(g))

q 894 Energy Allocation Act U 210 Land Condemnation Injury Product Employment q 650 Airline Regs q 864 SSID Title XVI

q 895 Freedom of Info . Act q 220 Foreclosure Liability © 446 American with q 660 Occupational q 865 RS1 (405(g)}

q 900 Appeal of Fee Determi - q 230 Rent Lease & Ejectment Disabilities - Safety /Health rPF,D) F(AL TAX SUITS

nation Under Equal q 240 Torts to Land Other q 690 Other q 87U faxes (U.S. Plaintiff

Access to Justice q 245 Tort Product Liability q 440 Other Civil or Defendant)

q 950 Constitutionality of q 290 All Other Real Property Rights q 87 ) IRS-Third Party 26

State Statutes USC 7609

VIII(a). IDENTICAL CASES: Has this action been previously filed and dismissed, remanded or closed? L'No q Yes

If yes, list case number(s):

FOR OFFICE USE ONLY, Case Number'

SAC-vo7-920 M )^ r^ ^^ Page 1 ofZCV-71 (07105) CIVII, COVER SHEET

NAME, Ann0.PSS & TELEPHONE NUMBER OF ATTORNEY(S) FOR, OR, PLAINTIFF OR

DEFENDANT IF PLAINTIFF OR DEFENDANT IS PRO PER

Lionel Z . Glancy (SBN # 134180)GLANCY BINKOW & GOLDBERG LLP1801 Ave , of the Stars, Suite 311 -Los Angeles , California 90067 ('-'Telephone : 310-201 -9150 Facsimile : 310-201-9160Email : [email protected]

G)

AI-FORNEYSFOR Plaintiff SHELDON PITTLEMAN ---

UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA

Sheldon Pittleman , on behalf of himself and all

i itl dil

CASE NUMBERSACV07-970 AG (MLGx)uatear y s ,others s m

Plaintiff(s),

V .

Impac Mortgage Holdings, Inc., Jospeh R. CERTIFICATION AND NOTICETomkinson , William S. Ashmore , Richard J . OF INTERESTED PARTIESJohnson and Gretchen D. Verdugo ,

Defendant(s) (Local Rule 7.1-1)

TO: THE COURT AND ALL PARTIES APPEARING OF RECORD:

The undersigned, counsel of record for Sheldon Pittleman

(or party appearing in pro per), certifies that the following listed party (or parties) has (have) a direct, pecuniary

interest in the outcome of this case. These representations are made to enable the Court to evaluate possibledisqualification or recusal. (Use additional sheet if necessary.)

PARTY CONNECTION

(List the names of all such parties and identify their connection and interest.)

1. Sheldon Pittleman2. GLANCY BINKOW & GOLDBERG LLP3. GARDY & NOTIS, LLP4. FARUQI & FARUQI, LLP5, all persons who purchased or otherwise acquired IMHsecurities during the Class Period , and who were damaged

thereby, excluding the Defendants herein, members of the

immediate families of the Individual Defendants , any parent,

subsidiary, affiliate, officer, or director of IMB, any entity in

which any excluded person has a controlling interest , and the

legal representatives , heirs, successors and assigns of anyexcluded person.

8117107

Date

PlaintiffAttorneys for PlaintiffAttorneys for PlaintiffAttorneys for PlaintiffProposed Class

Sign

^-- ( e '-7L 2 - 6 it

Attorney of record for or party appearing in pro per

NOTICE OF INTERESTED PARTIESCV-30(I2/03) j ^ i^ `_\`•. .'

F I L E D

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13

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Lionel Z. Glancy (SBN 134180)GLANCY BINKOW & GOLDBERG LLP1801 Ave. of the Stars, Suite 311Los Angeles, California 90067Telephone: 310-201-9150Facsimile: 310-201-9160Email: [email protected]

Counselfor Plaintiff

[Additional counselfor Plaintifflisted on signature page]

A.3 ^

01 A. i17

i+ i 3:

UNITED STATES DISTIRCT COURT

CENTRAL DISCTRICT OF CALIFORNIA

SACV07-970 AG (MLGx)SHELDON PITTLEMAN, on behalf ofhimself and all others similarly situated,

Plaintiff,

V.

IMPAC MORTGAGE HOLDINGS,INC., JOSPEH R. TOMKINSON,WILLIAM S. ASHMORE, RICHARDJ. JOHNSON and GRETCHEN D.VERDUGO,

Defendants.

No.

CLASS ACTION COMPLAINT

JURY TRIAL DEMANDED

Plaintiff Sheldon Pittleman ("Plaintiff"), individually and on behalf of all

other persons and entities who purchased or otherwise acquired securities issued

Impac Mortgage Holdings, Inc. ("IMH" or the "Company") between May 10, 2006

and August 15, 2007 inclusive (the "Class Period"), by his undersigned attorneys,

1CLASS ACTION COMPLAINT

(CXCiP

1 his Class Action Complaint ("Complaint"), alleges the following upon personal

2knowledge as to himself and his own acts , and upon information and belief as to all

3

4 other matters . Plaintiff ' s information and belief is based on his investigation

5 (made by and through his attorneys), which investigation included , among other

6things , a review and analysis of: (i) public documents pertaining to the defendants;

7

8 (ii) IMH ' s filings with the Securities and Exchange Commission ("SEC"); (iii)

9 press releases published by IMH; (iv) analyst reports concerning the Company; and

10(v) newspaper and magazine articles (and other media coverage) regarding IMH

11

12 and its business . Many of the facts supporting the allegations contained herein are

13 known only to the defendants or are exclusively within their custody and/or

14

15control. Plaintiff believes that further substantial evidentiary support will exist for

16 the allegations in this Complaint after a reasonable opportunity for discovery.

17 I. NATURE OF THE ACTION

181. This is securities class action brought on behalf of all purchasers of

19

20 IMH ' s publicly traded securities during the Class Period, which securities were

21 artificially inflated as a result of violations of the federal securities laws arising out

22

23of defendants ' (i) dissemination of false and misleading statements concerning the

24 Company' s financial results; and (ii) intentional and/or reckless disregard of basic

25 accounting principles.

26

27

28


j i

1 II. JURISDICTION AND VENUE

22. This action arises under Sections 10(b), and 20 (a) of the Exchange

3

4 Act of 1934 ("Exchange Act"), 15 U.S.C. §§78j(b) and 78t(a), and Rule IOb-5

5 promulgated thereunder , 17 C.F.R. § 240.1Ob-5.

63. This Court has subject-matter jurisdiction over this action pursuant to

7

8 Section 27 of the Exchange Act, 15 U.S.C. §78aa, and 28 U.S.C. § 1331.

9 4. Venue is proper in this District pursuant to Section 27 of the

10Exchange Act and 28 U.S.C. §1391. Many of the acts and practices complained of

11

12 herein occurred in substantial part in this District. IMH maintains its headquarters

13 in this District at 19500 Jamboree Road , Irvine, California 92612.

145. In connection with the acts , transactions and conduct alleged herein,

15

16 defendants, directly or indirectly, used the means and instrumentalities of interstate

17 commerce , including , but not limited to, the United States mails , interstate

18

19telephone communications and the facilities of a national securities exchange and

20 market.

21 III . THE PARTIES

226. Plaintiff Sheldon Pittleman purchased the publicly traded securities of

23

24 IMH at artificially inflated prices during the Class Period as set forth in the

25 accompanying certification (incorporated by reference herein).

267. Defendant IMH is a Maryland corporation , that is a real estate

27

28 investment trust (REIT), primarily engaged in the acquisition , origination, and


1 sales of non-conforming Alt-A residential mortgages ("Alt-A mortgages"), which

2are mortgage loans that have loan characteristics that make them non-conforming

3

4 under Fannie Mae or Freddie Mac guidelines, typically because of high loan-to-

5 value ("LTV") ratios, or lack of required documentation and/or verifications. IME

6operates primarily through its subsidiaries, IMH Assets Corp. (IMH Assets), Impac

7

8 Warehouse Lending Group, Inc. (IWLG), Impac Commercial Capital Corporation

9 (ICCC) formerly known as Impac Multi-family Capital Corporation (IMCC) and

10Impac Funding Corporation (IFC), together with its wholly-owned subsidiary

11

12 Impac Secured Assets Corp. (ISAC). Through these subsidiaries, IMH operates

13 four core businesses segments: (i) the Company's long-term investment operations

14are conducted by IMH and IMH Assets; (ii) the Company's mortgage operations

15

16 are conducted by IFC and ISAC; (iii) the Company's warehouse lending operation,

17 are conducted by IWLG; and (iv) the Company's commercial operations areis

conducted by ICCC. IMH is headquartered at 19500 Jamboree Road, Irvine,19

20 California 92612.

21 8. Defendant Joseph R. Tomkinson ("Tomkinson") has been Chairman

22

23of the Board of IMH since April 1998 and Chief Executive Officer and a Director

24 of IMH as well as Chairman of the Board and Chief Executive Officer and

25 Director of IFC, also known as the mortgage operations, and IWLG also known as26

27the warehouse lending operations, since their formation. From August 1995 to

28 April 1998, he was Vice Chairman of the Board and CEO of IMH. From February


1 1997 to May 1999, he was Chairman of the Board and Chief Executive Officer of

2Impac Commercial Holdings , Inc. ("ICH"), a real estate investment trust investing

3

4 in commercial mortgage assets . Tomkinson served as President and Chief

5 Operating Officer of Imperial Credit Industries , Inc. ("ICII ") from January 1992 to

6February 1996, and from 1986 to January 1992, he was President of Imperial Bank

7

8 Mortgage , one of the divisions that later was combined to become ICII in 1992. He

9 was a Director of ICII from December 1991 to June of 1999. In November 1995,10

along with Johnson and Ashmore, Tomkinson successfully completed the initial11

12 public offering ofIMH stock.

13 9. Defendant William S. Ashmore ("Ashmore") has been President of

14IMH and its taxable subsidiary , IFC, since 1995 in addition to being a Director of

15

16 IMH since July of 1997. Until August 2006, he was also Chief Operating Officer.

17 From 1988 until 1996 , Ashmore was employed with Imperial Credit Industries as

Executive Vice President and Director of Secondary Marketing. He was19

20 responsible for overseeing and directing loan sales and securitizations, loan

21 acquisitions , product development , hedging and pipeline management. In

22

23November 1995, along with Tomkinson and Johnson , Ashmore successfully

24 completed the initial public offering of IMH stock.

2510. Defendant Richard J. Johnson ("Johnson") has been the Executive

26

27Vice President and Chief Operating Officer of IMH, the mortgage operations, the

28 warehouse lending operations and the commercial operations since August 2006.


1 Between 1998 and August 2006, Johnson previously served as the Executive Vice

2President and Chief Financial Officer of IMH, the mortgage operations, the

3

4 warehouse lending operations and the commercial operations. From February 1997

5 to May 1999, he was the Executive Vice President and Chief Financial Officer of

6Impac Commercial Holdings, Inc. From September 1992 to March 1995, he was

7

g Senior Vice President and Chief Financial Officer of ICII. From November 1989 tc

9 September 1992, he was Vice President and Controller of ICII. In November 1995,

10along with Tomkinson and Ashmore, Johnson, successfully completed the initial

11

12 public offering of IMH stock.

13 11. Defendant Gretchen D. Verdugo ("Verdugo"), was at all relevant

14times Executive Vice President and Chief Financial Officer of IMH, IFC, IWLG

15

16 and ICCC. Verdugo joined the Impac Companies in August 1997.

17 12. Defendants Tomkinson, Ashmore and Verdugo are collectively

18referred to herein as the "Individual Defendants." The Individual Defendants and

19

20 IMH are collectively referred to herein as the "Defendants."

21 IV. CONTROL PERSON ALLEGATIONS/GROUP PLEADING

2213. By virtue of the Individual Defendants' positions within the

23

24 Company, they had access to undisclosed adverse information about its business,

25 operations, operational trends, finances, and present and future business prospects.

26The Individual Defendants would ascertain such information through IMH's

27

28 internal corporate documents (including the Company's operating plans, budgets


1 and forecasts and reports of actual operations compared thereto), conversations anc

2connections with other corporate officers and employees, conversations and

3

4 connections with vendors and customers , attendance at sales, management, and

5 Board of Directors ' meetings , including committees thereof, and through reports

6and other information provided to them in connection with their roles and duties as

7

8 IMH officers and directors.

9 14. It is appropriate to treat the Individual Defendants collectively as a

10group for pleading purposes and to presume that the materially false, misleading

11

12 and incomplete information conveyed in the Company's public filings and press

13 releases as alleged herein was the result of the collective actions of the Individual

14Defendants identified above. The Individual Defendants , by virtue of their high-

15

16 level positions within the Company, directly participated in the management of the

17 Company, were directly involved in the day-to-day operations of the Company at

18

19the highest levels and were privy to confidential proprietary information

20 concerning the Company and its business , operations , prospects , growth, finances,

2 1 and financial condition , as alleged herein.

22

2315. The Individual Defendants were involved in drafting, producing,

24 reviewing , approving and/or disseminating the materially false and misleading

25 statements and information alleged herein, were aware of or recklessly disregarded

26

27the fact that materially false and misleading statements were being issued

28


1 regarding the Company, and approved or ratified these statements, in violation of

2the federal securities laws.

3

4 16. As officers and controlling persons of a publicly-held company whose

5 common stock was, and is, registered with the SEC pursuant to the Exchange Act,

6and was traded on NYSE, and governed by the provisions of the federal securities

7

8 laws, the Individual Defendants each had a duty to promptly disseminate accurate

9 and truthful information with respect to the Company's financial condition and

10performance, growth, operations, financial statements, business, markets,

11

12 management, earnings and present and future business prospects, and to correct

13 any previously issued statements that had become materially misleading or untrue,

14so that the market price of the Company's publicly traded securities would be

15

16 based upon truthful and accurate information. The Individual Defendants' material

17 misrepresentations and omissions during the Class Period violated these specific

18requirements and obligations.

19

20 17. The Individual Defendants, by virtue of their positions of control and

21 authority as officers and/or directors of the Company, were able to and did control

22

23the content of the various SEC filings, press releases and other public statements

24 pertaining to the Company during the Class Period. The Individual Defendants

25 were provided with copies of the documents alleged herein to be misleading prior

26

27to or shortly after their issuance and/or had the ability and/or opportunity to

28


1 prevent their issuance or cause them to be corrected . Accordingly , they are

2responsible for the accuracy of the public reports and releases detailed herein.

3

4 V. CLASS ACTION ALLEGATIONS

5 18. Plaintiff brings this action as a class action pursuant to Federal Rules

6 of Civil Procedure 23(a) and 23 (b)(3) on behalf of a class (the "Class") of all7

8 persons who purchased or otherwise acquired IMH securities during the Class

9 Period, and who were damaged thereby, excluding the Defendants herein,

10 members of the immediate families of the Individual Defendants , any parent,11

12subsidiary , affiliate , officer, or director of IMH , any entity in which any excluded

13 person has a controlling interest , and the legal representatives , heirs, successors

14and assigns of any excluded person.

15

16 19. The members of the Class are so numerous that joinder of all

17 members is impracticable. While the exact number ofmembers of the Class is

18unknown to Plaintiff at the present time and can only be ascertained from books

19

20 and records maintained by IMH and/or its agent(s), Plaintiff believes that there are

21 tens of thousands of members of the Class located throughout the United States.

22During the Class Period , IMH had over 76 million issued and outstanding of

23

24 common stock . Throughout the Class Period , IMH common stock was actively

25 traded on NYSE.

2620. Plaintiff will fairly and adequately represent and protect the interests

27

28 of the members of the Class. Plaintiff has retained extremely competent counsel


1 experienced in class and securities litigation and intends to prosecute this action

2vigorously. Plaintiff is a member of the Class and does not have interests

3

4 antagonistic to, or in conflict with, the other members of the Class.

5 21. Plaintiff's claims are typical of the claims of the members of the

6Class. Plaintiff and all members of the Class purchased IMH securities at

7

8 artificially inflated prices and have sustained damages arising out of the same

9 wrongful course of conduct.

1022. Common questions of law and fact exist as to all members of the

11

12 Class and predominate over any questions solely affecting individual members.

13 Among the questions of law and fact common to the Class are:

14a. Whether the federal securities laws were violated by the

15

16 Defendants' acts and omissions as alleged herein;

17 b. Whether the Defendants participated in and pursued the

18

19common course of conduct and fraudulent scheme complained of herein;

20 c. Whether the Defendants had knowledge of (or were reckless

21 with respect to) the improper activities described herein;

22

23d. Whether the statements disseminated to the investing public,

24 including investors in IMH, during the Class Period omitted and/or misrepresented

25 material facts about IMH's true financial condition, business operations and future

26

27business prospects;

28


1 e. Whether Defendants acted knowingly or recklessly in omitting

2to state and/or misrepresenting material facts;

3

4 f. Whether the market price of IMH's securities during the Class

5 Period was artificially inflated due to the non-disclosures and/or misrepresentation:

6complained of herein; and

7

8 g. Whether Plaintiff and the other members of the Class have

9 sustained damages and, if so, the appropriate measure thereof.

1023. A class action is superior to other available methods for the fair and

11

12 efficient adjudication of this controversy since, among other things, joinder of all

13 members of the Class is impracticable. Furthermore, as the damages suffered by

14many individual Class members may be relatively small, the expense and burden

15

16 of individual litigation make it virtually impossible for Class members individually

17 to seek redress for the wrongful conduct alleged. Plaintiff does not foresee any

is

19difficulty in the management of this litigation that would preclude its maintenance

20 as a class action.

21 24. The names and addresses of the record owners of the shares of IMH

22

23common stock and other securities purchased during the Class Period are available

24 from IMH and/or its transfer agent(s). Notice can be provided to persons who

25 purchased or otherwise acquired IMH common stock by a combination of

26

27published notice and first class mail, using techniques and forms of notice similar

28


J i

1 to those customarily used in other class actions arising under the federal securities

2laws.

3

4 Vt. DEFENDANTS' FRAUDULENT SCHEME

5 25. IMH went public as a newly formed Real Estate Investment Trust

6 ("REIT") in November of 1995. The executive management team, however, had7

g been running the Company's mortgage banking and conduit operations since 1986,

9 when Tomkinson co-founded Imperial Credit Industries, Inc. ("ICII"). In 1991,

10 Wayne Snavely ("Snavely") took over Imperial Credit as chairman and chief11

12executive at which time the stock was trading in the $2-a-share range. Snavely

13 turned the company into a mini-conglomerate, entering everything -- usually by

14acquisition -- from investment banking to film finance to financing buyouts of fast-

15

16 food joints by franchisees. ICII also invested heavily in sub-prime consumer auto

17 loans and sub-prime mortgages, investments which ICII was ultimately forced to

18 write off in their entirety. Also in 1991, ICII was spun off from Imperial Bank and19

20 taken public. In 1995, ICII continued to diversify and as part of that progression,

21 contributed its mortgage banking and conduit operations to form Impac Mortgage

22Holdings, Inc., a Mortgage REIT, which went public in November of 1995. In

23

24 1996, Tomkinson resigned as President of ICII to devote his full time efforts as

25 Chief Executive Officer, and Chairman of Impac Mortgage Holdings, Inc.

2626. IMH is a REIT that is a primarily a nationwide acquirer, originator,

27

28 seller and investor of non-conforming Alt-A residential mortgages, which are


1 mortgage loans that have loan characteristics that make them non-conforming under

2Fannie Mae or Freddie Mac guidelines, typically because of high loan-to-value

3

4 ("LTV") ratios, or lack of required documentation and/or verifications. To a far lesser

5 extent, IMH also originated or acquired small-balance commercial mortgages, sub-

6prime residential mortgages, and warehouse financing to originators of mortgages.

7

8 27. As a REIT, IMH must distribute at least 90% of its taxable income to its

9 stockholders as dividends, of which 85% must be distributed within the taxable year

10in order to avoid the imposition of an excise tax. The amount and consistency of

11

12 these dividends were material to investors in valuing, purchasing and selling IMH

13 stock. Therefore, throughout the Class Period, IMH regularly disclosed estimated

14taxable income available to common stockholders, which it acknowledged was a

15

16 non-generally accepted accounting principle, or "non-GAAP," financial

17 measurement, yet admitted was useful information for Company investors.18

1928. The Company primarily operates four business segments: (1) the

20 Long-Term Investment Operations, (2) the Mortgage Operations, (3) the

21 Warehouse Lending Operations, and (4) the Commercial Operations.

22

2329. The Company's Long-Term Investment Operations invests primarily

24 in Alt-A residential mortgages loans and securities backed by such loans. Income

25 is generated from the net interest spread between interest income earned on its26

27portfolio and expenses associated with the Company's financing.

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1 30. The Company's Mortgage Operations is comprised of the Conduit,

2IFC and the Wholesale/Retail Division, Impac Lending Group, or ILG. The

3

4 Conduit purchases primarily Alt-A mortgage loans, and to a lesser extent, second

5 mortgage loans from its network of third party correspondents and other sellers.

6The Wholesale/Retail Division markets, underwrites, processes and funds

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8 mortgage loans for both the Company's wholesale and retail customers. The

9 Mortgage Operations generates income through the securitization and sale of loans

10to permanent investors in the form of Collateralized Mortgage Obligations

11

12 ("CMO"s), or Real Estate Mortgage Investment Conduits ("REMIC"s), or whole

13 loan sale transactions. Throughout the Class period, IMH was under a contractual

14obligation to repurchase certain of the loans sold or securitized through CMOs,

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16 REMICs and whole loan sales. The continued access to capital through the ability

17 to securitize mortgages through CMOs, REMICs and whole loan sale transactions

18was crucial to enable IMH and its Mortgage Operations to continue to generate

19

20 revenue. Revenues are also generated by Mortgage Operations from fees

21 associated with mortgage servicing rights, master service agreements and interest

22income earned from loans held for sale.

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24 31. The Company's Warehouse Lending Operations provides short-term

25 financing to the Conduit and other approved mortgage bankers to fund mortgage

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27loans from their closing until sale or other settlement with pre-approved investors.

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1 The division earns fees and a spread from the difference between its cost of capital

2and interest earned on the capital invested.

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4 32. The Commercial Operations originate hybrid commercial , or multi-

5 family, mortgages with balances typically ranging from $500 ,000 to $5.0 million.

6The Company ' s long-term investment operations invest in these assets, which

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8 provide greater asset diversification . Commercial borrowers typically have higher

9 credit scores and commercial mortgages typically have lower loan-to-value (LTV)

10ratios and longer average term to payoff than Alt-A mortgages.

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12 33. Throughout the Class period , IMH focused its business on the

13 origination , acquisition and securitization of Alt-A mortgages , which represented

14more than 92 % of the loans originated or acquired by IMH in Fiscal year 2006.

15

16 More than 75% of these mortgages were adjustable rate mortgages and greater than

17 25% of these mortgages provided for reverse amortization.

18

1934. Defendants distinguished the Company ' s operations from similar

20 REITs that invested in sub-prime loans and represented to the investing community

21 that IMH' s superior underwriting of the nonconforming Alt-A mortgages generated

22

23a long-term , high-quality portfolio and that these Alt-A mortgages were not subject

24 to the same risks and market fluctuations as sub-prime loans . For example, IMH

25 maintains a website to respond to frequently asked questions from investors, on26

27which Defendants represented:

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J i

1 In general, Alt-A loans have stricter underwriting guidelines than2 subprime loans. For example, to qualify for an Alt-A loan, a borrower

must have established at least five trade lines of credit, which might3 include credit cards or a car loan, and each trade line of credit must be4 consistent for a minimum of 24 months. Meanwhile, subprime

borrowers in general can have between zero and three trade lines5 depending on the loan-to-value ratio, and each trade line must be6 consistent for a minimum of six months. In addition, Alt-A borrowers

must not have a bankruptcy within 24 months prior to loan approval,7 whereas there is no minimum elapsed time for subprime borrowers.8 To qualify for an Alt-A loan, borrowers must have no rolling

mortgage lates, whereas subprime loans allow rolling 30 days lates9 within the last 12 months, up to 90 days late. We believe Alt-A

10 mortgages are normally subject to lower rates ofloss anddelinquency than subprime mortgages.

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13 Our strict underwriting strategies enable us to maintain a high-

14 quality long-term investment portfolio. For a very high percentage ofloans, employment is provided and verified for at least two years. Most

15 of our loans require either full documentation or stated income and

16 verified assets. In addition, any loans with a loan-to-value ratio ofmore than 80 percent have either borrower- or lender-paid mortgage

17 insurance. We proactively adjust our underwriting guidelines based18 on market conditions and actual loan performance.

19 Misrepresentations

20

2135. On May 10, 2006, IMH issued a press release announcing its financial

22 results for the first quarter of 2006 ending. The Company reported estimated taxable

23 income available to common stockholders was $27.1 million or $0.36 per diluted

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25common share. The Company further reported net earnings of $85.6 million, or

26 $1.07 per diluted common share, as compared to net earnings of $173.6 million, or

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1 $2.23 per diluted common share for the first quarter 2005. Tomkinson commented

2on the results, stating:

3

4 Given current trends, the Company remains cautiously optimistic that2006 will continue to bring improved financial performance. We

5 believe that our core strategy of maintaining a large portfolio of6 primarily high credit quality, adjustable rate residential and

commercial mortgages, along with our strong liquidity position and7 centralized platform leave the Company well positioned to deliver8 long term value to our stockholders.

9 With respect to our mortgage business, we believe that based on10 economic forecasts, we will continue to be in a healthy acquisition

and origination market. However, as competition has intensified,11 many of our competitors have relaxed their underwriting guidelines

12 and created what we believe to be more layered risk in the market.Essentially, we are not comfortable investing in certain higher risk

13 mortgage products, and as a result have revised our underwriting14 guidelines and adjustedpricing . Although total acquisitions and

originations are down, we have successfully reduced expenses,15 improved profitability and continue to remain confident in our ability16 to navigate a more challenging environment and grow our business.

17 36. In response to this announcement, the trading price of IMH common

18stock surged from a close of $9.87 on May 9, 2006 to a high of $11.59 on May 11,

19

20 2006, on massive two day volume of 5.6 million shares. This represented a two

21 day increase of 17.5 %.

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2337. On August 9, 2006, IMH issued a press release announcing its

24 financial results for the second quarter of 2006, the period ending June 30, 2006.

25 The Company reported net earnings of $26.4 million, or $0.30 per diluted common

26

27share, as compared to a net loss of $(55.0) million, or $(0.78) per diluted common

28 share for the second quarter 2005. The Company further reported estimated taxable



2common share. Tomkinson commented on the results, stating:

3

4 During the second quarter 2006, as part of the Company's strategy tomaximize profitability and take advantage of favorable pricing in the

5 secondary market, the Company completed $2.1 billion in whole loan6 sale transactions, issued an $834.0 million REMIC securitization and

retained a $29.8 million residual interest in the REMIC. As a result of7 the REMIC qualifying as a sale for both GAAP and tax purposes, the8 Company did not record any additional securitized mortgage collateral.

It is important to recognize that with the issuance of the REMIC which9 qualified as a sale for both GAAP and tax purposes, in addition to whole

10 loan sales to third parties rather than the REIT and prepayment activity,the balance sheet has declined, however taxable yield from residuals has

11 become and is expected to continue to be a larger component of taxable

12 income.

13 Our fundamental strategy remains the same. We will continue to seek to14 acquire, originate and invest primarily in Alt-A residential and small-

balance commercial loans, focusing on higher credit, longer duration15 mortgage loans. We are cautiously optimistic about the outlook in our

16 core businesses and our capital position is strong, however given thecontinued challenging environment we continue to evaluate all of the

17 opportunities available to us in striving to maximize returns while

18 minimizing risk.

19 38. On November 8, 2006, IMH issued a press release announcing its

20

21financial results for the third quarter of 2006, the period ending September 30, 2006.

22 The Company reported estimated taxable income available to common stockholders

23 was $17.3 million or $0.23 per diluted common share. Tomkinson commented on

24

25the results, stating:

26 Although adjusted net interest income decreased primarily due to adecline in the average balances of the securitized mortgage collateral,

27 as a result of our hedging strategies and the federal reserve pausing28 further increases in short-term interest rates, our adjusted net interest


margins during the third quarter stabilized. Furthermore, as a result ofincreased loan acquisitions and originations, the Company completeda $2.0 billion REMIC securitization at the end of the third quarterwhich was structured as a sale for tax and a financing for GAAP.

We are cautiously optimistic that based on current production and theprojected issuance of two additional REMIC securitizations during thefourth quarter, the balance sheet should experience modest growth.Despite the headwinds facing our industry, we continue to believe thatthe fundamentals of our business are solid, consolidation andacquisition opportunities are attractive, and that the strategies we haveput into place over the last year should position the Company toincrease stockholder value 11112007.

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With respect to the third quarter net loss, it is important to understandthat the change in fair value of our derivatives instruments is primarilya non-cash mark-to-market loss. These derivative instruments areused to partially offset increases in borrowing costs as assets arefinanced on the balance sheet. The change in fair value of thederivative instruments during the third quarter was primarily the resultof the market's expectations that interest rates would decline over thenext 12 months. The Company marks to market the change in fairvalue on a quarterly basis. Because under GAAP rules the relatedassets in the securitized mortgage portfolio do not receive a similarmark-to-market treatment, the change in fair value may create asignificant amount ofquarter-to-quarter volatility in our netearnings, however it has no effect to our cash flows, estimatedtaxable income or dividends.

39. On February 23, 2007, IMH issued a press release announcing its

financial results for the full year 2006, ending December 31, 2006. The Company

reported estimated taxable income available to common stockholders was $79.5

million or $1 .05 per diluted common share for 2006. The Company further

that during 2006, it paid common stock dividends of $72 .3 million , or $0.95 per

diluted common share, excluding the fourth quarter dividend of $0.25 per common


i

1 share declared and paid in January of 2007. Tomkinson commented on the results,

2stating:

3

4 2006 was another challenging year for the industry. Despite marketpressures, Impac adhered to its credit, investment and liquidity

5 practices while utilizing its resources to focus on generating taxable6 income and expanding our senior management team in order to take

advantage ofopportunities ahead. Although recent trends in the7 performance of our Long - Term Investment Portfolio have been more8 favorable, Impac's 2006 earnings came under continued pressure as the

Federal Reserve increased short-term interest rates through the first half9 of the year and as average securitized mortgage collateral declined as

10 the Company tightened underwriting guidelines and adjusted pricing tointentionally reduce loan production and limit its exposure to what we

11 believed to be deteriorating credit trends in the mortgage market. The

12 prudence ofthis strategy became apparent as the mortgage industrycontinued to face rising earlypayment defaults and increasing

13 repurchase activity related to late 2005 and 2006 originations.

14In anticipation of fundamental changes in the mortgage and real estate

15 market during 2005 Impac created the Enterprise Risk Management16 Group ("ERM"). The goal of ERM is to integrate analytical technology

and statistical data to better evaluate credit and prepayment risk. The71 Company utilizes its risk based targeted marketing tools, including

18 iMAP, its external proprietary analytical/marketing tool, iSMA itsinternal performance ranking tool along with the integration of third

91 party products to pre-screen fraudulent loans, better address layered20 risk, optimize pricing and selectively invest in higher credit quality and

longer duration loans. Based on its loan level analysis, the Company21 determined that a significant amount of risk was primarily related to22 high loan-to-value second trust deed loans and layered risk loans with

shorter durations of three years or less. The best performing loans were23 Option ARM and higher credit quality Alt-A loans.

24As a result ofthis analysis ofrepurchased loans and delinquency

25 trends in its portfolio, the Company tightened its underwriting26 guidelines seventeen times during 2006. Although these changes

significantly decreased our loan production it resulted in a change in27 the product concentration of our acquisitions and originations to28 primarily longer duration and higher credit quality loans. So while in


1 the last halfofthe year we continued to flush out the repurchase2 liability related to prior whole loan sale activity, based on a tightening

ofunderwriting guidelines which began in thefirst quarter ofthe3 year, we believe that these changes should reduce our overallfuture4 repurchase exposure.

5 * *x6

During 2006 we faced a highly competitive mortgage industry and an7 unfavorable yield curve, particularly in the first half of the year. In8 2006, the Federal Reserve increased short-term interest rates 100 basis

points before pausing in June. Although the yield curve was partially9 inverted for most of the year, our adjusted net interest margins began to

10 widen during the fourth quarter. Our margins improved as ourborrowing costs which are tied to one-month LIBOR stabilized and the

11 adjustable rate mortgages in the securitized mortgage portfolio began to12 reset at higher rates. Adjusted net interest margins were also positively

affected by a reduction in amortization of premium and securitization13 costs over the year."

14Given current market conditions, we expect some growth in our

15 balance sheet with potential improvement to our adjusted net interest

16 margins. Our strategy is to continue to invest in longer durationloans including commercial mortgages, while selling the Option

17 ARMproductfor cash gains. Offsetting these positive prospects has18 been the increase of non-performing loans, real estate owned and actual

loan losses which remain within our expectations, but are expected to19 continue to reduce REIT taxable income. Further, estimated taxable20 earnings and profits at the Mortgage Operations during the first half of

2007 are expected to be impacted as we liquidate non-performing loans21 at the taxable subsidiary.

22Although we are disappointed by our earnings performance in 2006,

23 our results are to some extent indicative of market conditions, as well24 as strategies implemented early in the year to reduce originations and

our exposure to inferior credit quality mortgages. These proactive25 strategies are intended to protect long-term stockholder value and26 prepare the Companyfor improvedfinancialperformance. We

continue to believe that the Company remains well capitalized,27 diversified amongst its business segments andpositioned to28 successfully navigate through this cycle.


40. Ashmore commented on the Company' s future prospects , stating:

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The Mortgage Banking Association ("MBA") is predicting a decline ofapproximately 5% in total mortgage originations for 2007, compared toan 18% projected drop in originations during 2006. As a result of .consolidation within the industry and a number ofcompanies goingout ofbusiness our 2007 business plan anticipates that loanproduction will remain at current levels, with continued volatility inour bulk acquisitions, offset by the continued expansion ofour Alt-Awholesale and commercial platforms. Our 2007 business plan fitswell into our long term strategy to have our wholesale businesschannels make up the majority ofour overall originations that willsupport the growth ofthe Long-Term Investment Portfolio.

41. Following these announcements the trading price of IMH common

stock closed at $7.30 on February 23, 2007.

42. Beginning early in 2007, real estate funds, particularly those that

specialized in non-conforming or sub-prime mortgages, began suffering serious

declines in their stock price. In a continuing attempt to disassociate IMH from funds

investing in sub-prime loans, on March 5 , 2007, the Company issued an

unprecedented press release stating in relevant part:

The following is in response to recent media reports that have had anadverse impact upon our common stock price, Impac MortgageHoldings, Inc. (NYSE: IMH), or the "Company", a Marylandcorporation being taxed as a real estate investment trust ("REIT") :

1) Impac is an Alt-A Lender. Substantially all of the mortgages weoriginate or acquire are Alt-A loans. We define Alt-A loans asmortgages made to borrowers whose credit is generally within FannieMae and Freddie Mac guidelines, but have loan characteristics that makethem non-conforming under those guidelines. As of the fourth quarter2006, 99.8% of the loans held in our portfolio had a credit grade ofA orA-, which means that the credit rating exceeded 620, with a weightedaverage loan-to-value ratio of 74%. As of December 31, 2006, theweighted average credit score of the Alt-A loans in our portfolio (i.e. thelong-term investment operations) was 697. During 2006, subprime


I mortgages represented 0.4% of acquisitions and 0.2% of the ending2 securitized mortgage collateral. We define subprime mortgages made to

borrowers with credit ratings less than 620, or other characteristics, that3 increase the credit risk. In addition, the major credit rating agencies,4 mortgage bond investors and our industry identify the Company as an

Alt-A lender.5

6 2) The Company's liquidity position is strong. At December 31, 2006,the Company reported approximately $180.0 mullion in cash and cash

7 equivalents. Further, the Company has additional liquidity of8 approximately $75.0 million in equity invested in mortgage loans held-

for-sale and other liquidity sources at the Company's disposal.9

10 3) Estimated taxable income is the primary indicator for common stock

dividends. During 2006, the Company had estimated taxable income of11 $79.5 million, or $1.05 per diluted common share. During 2006, we paid

12 common stock dividends of $72.3. million, or $0.95 per diluted commonshare.

13

14 4) Estimated taxable income during the fourth quarter 2006 was

generated entirely from the balance sheet at the REIT and did not include

15 a dividend from our taxable REIT subsidiary.

165) The Company believes it has sufficient financing under its reverse

17 repurchase agreements to meet its ongoing origination and funding18 needs.

19 6) The Company continues to meet all of its loan repurchase20 obligations. In the future we expect loan repurchase obligations to

decline based on a reduction in whole loan sales and improved credit and21 duration characteristics. Since January 2006, we have tightened our

22 underwriting guidelines 20 times, which resulted in a 40% decline in

total production primarily related to bulk acquisitions. Although, total2 3 acquisitions and originations declined, we believe we have benefited

24 from an improved credit risk and duration profile. We believe this wasvalidated by the secuntization market where despite one of the more

25 turbulent credit spread environments in recent history, Impac executed26 its most recent securitization with the tightest bond spreads it has

27experienced in over a year.

28


7) The restatements for 2004 - 2005, as previously described in ourForm 8-K filed on February 23, 2007 has no effect on the Company'snet earnings, cash position, stockholders' equity or taxable income.

43. Tomkinson f rther commented, stating:

It is unfortunate for our stockholders that the Company continues tobe put in the same category as subprime lenders, when essentially wehave no exposure to subprime loans. In anticipation of a downturn inthe industry, Impac, since January 2006, began increasing its loan lossreserves, preserving capital, increasing its pricing and tightening itsunderwriting guidelines with the intent to further improve theperformance of our Alt -A mortgage portfolio.

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We believe that the Company has adequately prepared for thischallenging market. We believe that the Company is well capitalized,diversified in its business segments and has the expertise to managethrough this lending cycle.

44. On March 11, 2007, Allistair Blair of MarketWatch.com published an

article highlighting the increasing difficulties posed by Alt-A mortgages, which

stated in pertinent part:

Alt-A loans were originally designed for borrowers with clean creditrecords, but with other issues that often meant they provided fewerdocuments or even no documents showing what they earned. Theseloans were attractive to mortgage investors because they offeredhigher yields than traditional "prime" home loans, but wereunderpinned by the cleaner credit records of the borrowers.

The popularity of Alt-A mortgages exploded in recent years. A record$400 billion of these loans were originated in 2006. They accountedfor 13.4% of all mortgages offered last year, up from 2.1 % in 2003,according to industry publisher Inside Mortgage Finance.

But as the Alt-A business grew, more ofthese loans were offered toless creditworthy borrowers, creating what Mark Adelson, head ofstructuredfinance research at Nomura Securities International,calls "Alt-B "products.


I f

1 "The Alt-A market has absorbed and disguised a portion ofthe2 subprime space," he said. "You can debate how to define these

loans, but many have ended up being an Alt-A product with3 subprime deficiencies."

4

5

6 "In the pastfew years, Alt-A loans were made to weaker and weakerborrowers and the sector expanded downward along credit

7 spectrum," he said. "In doing that, you draw up into the Alt-A space

8 some oftheproblems that are affecting the subprime space. "

9 Indeed, losses on Alt-A loans were already creeping up at the end of

1 a last year: 2.38% ofAlt-A loans were at least 60-day delinquent inDecember, according to First American LoanPerformance, a unit of

11 real estate data specialist First American (FAF:First American).

12 That 's the highest level since February 2004 and upfrom 0.93% inAugust 2005.

13

14 Data on Alt-A mortgages that have been packaged up and sold asmortgage-backed securities show the growing popularity of low-

15 documentation and stated-income loans.

16More than 80% of Alt-A mortgages that were securitized in 2006

17 were low-documentation, stated-income loans, according to Inside18 Mortgage Finance. That's up from 68% in 2005.

19 Data from LoanPerformance tell a similar story: 58% of all mortgages20 originated in the fourth quarter of 2006 were low-documentation

21loans. That was up from 21 % at the start of 2000.

22 In California, which has seen some of the biggest gains in home pricesthis decade, 86% of all mortgages offered in the fourth quarter were

23 low-documentation loans. That's up from 29% in early 2000,24 LoanPerformance data show.

25 45. On March 14, 2007, the Company filed its annual report on Form I OK

26

27with the SEC, which was signed, inter alia, by Defendants Tomkinson, Ashmore

28 and Verdugo. With respect to estimated taxable income, this 10K stated:


I Estimated taxable income available to common stockholders2 was $79.5 million, or $1.05 per diluted common share, for 2006 as

compared to $142.9 million, or $1.87 for 2005 and $202.9 million, or3 $2.97 for 2004. To maintain our REIT status, we are required to4 distribute a minimum of 90 percent of our annual taxable income to

our stockholders. Because we pay dividends based on taxable5 income, dividends may be more or less than net earnings (loss). As6 such, we believe that the disclosure of estimated taxable income

available to common stockholders, which is a non-generally accepted7 accounting principle, or "GAAP," financial measurement, is useful8 information for our investors.

9 We paid total cash dividends of $0.95 per common share during

10 2006, $1.95 during 2005 and $2.90 during 2004, which, whencombined with available tax loss carry-forwards met taxable income

11 distribution requirements for each year. Distributions to stockholders

12 will generally be taxable as ordinary or qualified dividends, althoughsuch distributions may be designated as capital gains or a tax-free

13 return of capital. Under the Jobs and Growth Tax Relief Act of 2003,

14 a portion of the total common stock cash dividends paid to ourstockholders during 2005 and 2006 were the result of dividends paid

15 from IFC to 1MH which will be taxed as qualifying dividends. IMH

16 annually furnishes to each of its stockholders a statement setting forththe tax characteristics of the dividends. The 2006 dividend

17 distribution characteristics are 91.5 percent and 8.5 percent as1 g ordinary income and qualifying dividends, respectively.

19 46. This I OK disclosed that the Company was restating its financial

20 results for 2004 and 2005. Specifically, the I OK stated in relevant part:21

Certain amounts in the 2005 and 2004 Consolidated Statements22 of Cash Flows have been restated to properly reflect specific

intercompany activities related to cash receipts from loan sales and23 cash disbursements for loan purchases between consolidated

companies. Such intercompany loan sale and purchase transaction24 activities had the effect of presenting separate cash inflows and

outflows even though there was no cash inflow or outflow on a25 consolidated basis. This restatement serves to eliminate this

intercompany activity from its Consolidated Statements of Cash26 Flows and present them as non-cash transactions.

27 The correction of the error increases cash used in operatingactivities and increases cash provided by investing activities. The

28 restatement of these transactions does not change total cash and cash


1 equivalents as reported for December 31, 2005 and 2004.Furthermore, the restatement has no effect on the Company's

2 Consolidated Statements of Operations and Comprehensive Earnings,Consolidated Balance Sheets or Consolidated Statements of Changes

3 in Stockholders' Equity.

4 In addition certain amounts within the Consolidated Statementsof Operations and Comprehensive Earnings have been restated to

5 reflect the "Amortization of deferred charge" for 2005 and 2004 asincome tax expense (benefit) rather than non-interest expense. The

6 "Amortization of deferred charge" relates to income taxes onintercompany gains and this correction is believed to more

7 appropriately reflect the overall income tax charges or benefits during20-05 and 2004. The restatement of this information does not change

8 net earnings as reported for December 31, 2005 and 2004.Furthermore, the restatement has no effect on the Company's

9 Consolidated Balance Sheets, Consolidated Statements of Changes inStockholders' Equity or Consolidated Statements of Cash Flows as

10 reported.

11 47. On May 10, 2007, IMH issued a press release announcing its financial

12results for the first quarter of 2007. The Company reported estimated taxable

13


15 common share. Tomkinson commented on the announcement, stating:

16Given overall market conditions , we are pleased to report

17 strong estimated taxable income generated at the REIT, continued18 investor appetite for Impac bonds while maintaining solid liquidity

in our organization.19

20 During the first quarter, the market conditions required us tofocus on preserving liquidity. As such, we have maintained liquidity

21 levels consistent with year-end balances. We aggressively settled

22 repurchase request claims. We have closely monitored our reverserepurchase facilities to manage our margin call exposure, additionally

23 we have decreased the time the loans are outstanding on the facilities,24 by selling loans more frequently. During the first quarter of 2007, we

liquidated $52.0 million in delinquent loans to both manage any25 margin call exposure on our reverse repurchase lines as well as26 convert mortgage loans into cash."

27 Also during the first quarter, we added a new reverse28 repurchase facility with $1.0 billion in capacity and we renewed


another reverse repurchase facility with $1.5 billion capacity,extending the maturity to March 2008. We completed securitizationstotaling $2.4 billion in the first quarter to minimize exposure tomargin calls and keep inventory low on these facilities. The reverserepurchase balance at March 31, 2007 was $1.2 billion with a totalcapacity of $6.0 billion as compared to $1.9 billion with total capacityof $5.7 billion at year-end 2006."

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We have continued to price our loans for profitability which hasresulted in reduced production volumes from the fourth quarter of2006 . Although we expect reduced loan volume as compared to2006, current market conditions have created other opportunities forthe Company. We have seen improvements in our adjusted netinterest margin as a result ofdecreased amortization ofloanpremiums due to lower actual and expectedprepayments and longerduration ofthe loans in the portfolio, partially offset by increasedcredit losses. To take advantage of what we believe will be attractivereturns in the distressed loan market, we have also invested in anasset management group that willpurchase and liquidate distressedassets. In addition, we are reviewing other strategies to protect ouradjusted net interest margin, reduce production costs and selectivelymaintain our mortgage operations infrastructure in preparation for amore favorable market.

We continue to believe that the long-term prospects for ourbusinesses are attractive and that we will be the beneficiary ofconsolidation in the marketplace. In the interim, the Company willcontinue to take the steps necessary to protect stockholder valuewhile evaluating opportunities to improve long term performancethrough diversification ofinvestments, continued robust credit riskmanagement and synergistic growth.

48. Defendants Class Period public representations referenced above

were each materially false and misleading when made as they misrepresented the

following material adverse facts which were known to the Defendants or reckless

disregarded by them:


1 a. that the Company's Alt-A mortgages were experiencing the

2same risks and discounts in securitization as sub-prime mortgages;

3

4 b. that a substantial number of the purportedly Alt-A mortgages

5 were offered to less creditworthy borrowers, creating what Mark Adelson, head of

6structured finance research at Nomura Securities International, calls "Alt-B"

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8 products, essentially an Alt-A product with subprime deficiencies;

9 c. that the Company was experiencing an increasing level of loan

10delinquencies which was depressing its earnings and simultaneously increasing the

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12 numbers of mortgage loans the Company was required to repurchase under the

13 terms of the whole-loan sale agreements;

14d. that the Company was experiencing increasing difficulties in

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16 selling its loans because of the lower credit worthiness of the borrowers and the

17 higher rates of default and, therefore, was required to decrease prices, thereby

18reducing margins and profits; and

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20 e. that as a result of the foregoing, the Company was overstating

21 its financial results by failing to write-down the value of certain of the loans in its

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23portfolio as these loans had declined substantially in value.

24 The Truth Begins to Emerge

25 49. By mid-June, 2007, price ofIMH common stock began to decline based

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27upon concerns about the ability of the Company to continue to securitize its portfolio

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1 ofAlt-A mortgages . IMH stock declined from $6 . 50 per share on June 18 , 2007, to

2$2.06 per share by August 1,2007.

3

4 50. Then, during the first week of August, 2007 , UBS issued an analyst

5 report which downgraded IMH from hold to sell and reduced the price target from

6$3.00 to $0 . 00. This UBS analyst report also questioned whether IMH would

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8 continue to be able to meet its margin calls under its lines of credit.

9 51. On August 7, 2007, the Company issued a press release in which

10Tomkinson stated:

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12 The Company has made all margin calls to date . Further, we havenegotiated sales of approximately $ 1.0 billion of our $1.6 billion of

13 loans held on financed facilities . These negotiated sales are scheduled

14 to close over the next 30 days. In the interim , loans held in aggregatecontinue to generate a positive net interest spread.

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16 In light of the continued and widely publicized volatility in thesecondary and securitization markets, we have suspended funding on

17 loans previously referred to as Alt-A loans. The Company will18 continue to fund loans through our wholesale and retail platforms that

are eligible to be sold to government sponsored agencies . Further, in19 response to lower loan volumes , we have over the last three months20 significantly decreased our expenses with the reduction of our

nationwide workforce and will continue to make additional21 adjustments as necessary . While this is a difficult and painful

22 decision , we believe that it ' s a prudent strategy in light of the currentbusiness environment.

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24 Mr. Tomkinson commented , "We would like to remind ourstockholders that these rapid changes are widespread in our industry

25 and while we are continuing to assess the market daily and can not26 make any assurances, we believe that we are taking the right steps to

27preserve long term stockholder value

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52. In a separate press release, also dated August 7, 2007, the Company

responded to the UBS analyst report stating in pertinent part:

1) The Company has made all margin calls to date and on July 31,2007 we declared a stock dividend on our Series B and Series Cpreferred stock.

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2) We have financing facilities and are continuing to fund loans.While we have temporarily suspended originating and funding ofloans previously referred to as Alt-A loans, we will, through ourwholesale and retail platforms, continue to fund loans eligible to besold to government sponsored agencies. In late May, Impac, with itsacquisition of the assets of Pinnacle Financial Corporation, became anationwide retail lender with expertise in conforming agency loanprograms. Further, we are pleased to announce that the Company hasalso secured definitive agreements to begin originating and sellingreverse mortgage loans through its wholesale and retail platforms.

3) Despite the significant volatility in the secondary market we havenegotiated sales of approximately $1.0 billion of our $1.6 billion ofloans held on financed facilities. We expect the sale of these loans tosatisfy the related current borrowing balances with the excess cashproceeds to be credited to the Company.

53. Tomkinson further commented, stating:

I would like to disclose to our stockholders that this UBS analystwrote this report without speaking to management since our earningsconference call on May 11, 2007. Further, we believe that hiscomments are largely speculative and are adding to the volatility ofthe stock price.

While we can not make any guarantees, we continue to believe thatwe can successfully navigate through this cycle emerging as astronger, more competitive company.

54. On August 10, 2007, the Company shocked the market by announcing

that it would not be able to timely file its quarterly report on Form I OQ "as a result

the recent volatility and disruptions in the mortgage and secondary markets and31


1 integration and analysis ofthefinancial informationfrom its May 2007 acquisition

2ofcertain assets and liabilities, each ofwhich caused the management to need mori

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4 time to review andprepare itsfinancial statements."

5 55. On this announcement, the trading price of IMH common stock declined

6to a close of $1.68 on August 10, 2007, a from a Class Period high of $11.70 on June

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8 2, 2006.

9 56. On August 14, 2007, the Company filed its quarterly report for the

10second quarter of 2007 on Form I OQ with the SEC. The 1 OQ revealed that the

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12 Company was reporting an estimated taxable loss per diluted share of ($0.25)

13 compared to income of $0.25 for the first quarter of 2007 and $0.27 for the

14second quarter of 2006. Defendants further admitted in the IOQ that :

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16 During the second quarter, the secondary and securitization mortgagemarkets have deteriorated, become more unpredictable and volatile,

17 making it more difficult to sell loans and securities to investors. In18 addition, because housing prices have declined, default and credit

losses have increased; investors are requiring higher returns, reducing19 the price of mortgage loans. As a result, the loans have not performed20 up to expectations and the fair value of mortgage loans has

deteriorated.21

22 In light of the continued and widely publicized volatility in thesecondary and securitization markets , the Company suspended

23 funding on loans previously referred to as Alt-A loans in August24 2007 and currently do not have any plans to originate these types of

loans in the nearfuture. At this point, the Company is only funding25

loans that are eligible to be sold to government sponsored agencies.

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1 57. Defendants further explained the decline in the Company's financial

2results was the result of a longstanding trend begun in 2006 which led to margin

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4 calls and defaults under the Company's lines of credit and financing arrangement

5 During the second quarter, the secondary and securitization mortgage6 markets have deteriorated, become more unpredictable and volatile,

making it more difficult to sell loans and securities to investors. In7 addition, because housing prices have declined, default and credit8 losses have increased; investors are requiring higher returns, reducing

the price of mortgage loans. As a result, the loans have not performed9 up to expectations and the fair value of mortgage loans has

10 deteriorated. The underlying reason for the deterioration ofindustryconditions appears to be initially based on the relatively poor

11 performance ofloans originated in 2006. This decline in12 performance has led to a lack of confidence by bond investors and

lenders and their reluctance to invest/lend as aggressively. These13 market conditions have also increased the Company's loss severities

14 during the second quarter.

15 Recently these market conditions required us to focus on preserving

16 liquidity . We have received a significant amount ofmargin callsfrom our lenders and continue to receive margin calls due to the

71 current market environment, we intend to satisfy these margin calls;

18 however, we cannot make any assurances we will satisfy margincalls received in the future. In addition , we are operating under

19 waivers provided by certain lenders, as certain lenders have waived20 certain covenants that require us to maintain positive net income

and certain leverage ratios. There can be no assurance that we will21 be able to obtain future waivers or new waivers if covenants are not

22 met, or that we will be able to obtain waivers on favorable terms.Further, we have negotiated sales of approximately $1.0 billion of our

23 $1.6 billion of loans held on financed facilities.

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25 During the quarter ended June 30, 2007, the residential mortgage

26 market continued to be affected by increasing interest rates, aweakening housing market and increasing delinquencies and defaults,

27 regulators and legislators increased their focus on tightening28 underwriting standards for new mortgage loans. Many nonprime


1 mortgage lenders were impacted by reduced liquidity and as a result,2 were required to scale back or cease operations. Most market

participants responded to changes in the marketplace with changes in3 product offering and tightening of underwriting guidelines.

4Additionally , the Company did not declare a cash dividend on our

5 common stock during the second quarter of2007, as the dividend6 may be considered a return ofcapital. Currently, we do not

anticipate paying anyfurther dividends on our common stockfor

7 the remainder of2007.

8 58. The financial results also revealed that during the second quarter, the9

10Company was forced to increase its loan loss reserves by more than 455%, from

11 $29,374,000 to a staggering $162,981,000. This $133.6 million increase in

12provision for loan losses, was combined with a $12.4 million charge off for the

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14impairment of goodwill, and an $8.5 million increase in provision for REO losses

15 generated from the foreclosure of non-performing mortgages, to cause the

16Company to report net loss of $152.5 million or $2.05 per share for the second

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18 quarter of 2007 as compared to a net loss of $121.7 million or $1.65 per share, for

19 the first quarter of 2007.

20 VII. INAPPLICABILITY OF SAFE HARBOR21

22 59. As alleged herein, the Defendants acted with scienter in that they

23 knew, at the time that they issued them, that the public documents and statements

24issued or disseminated in the name of IMH were materially false and misleading or

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26 omitted material facts; knew that such statements or documents would be issued or

27 disseminated to the investing public; knew that persons were likely to reasonably

28rely on those misrepresentations and omissions; and knowingly and substantially


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participated or were involved in the issuance or dissemination of such statements

or documents as primary violations of the federal securities law. As set forth

elsewhere herein, the Defendants, by virtue of their (i) receipt of information

reflecting the true facts regarding IMH, (ii) control over, and/or receipt of IMH's

allegedly materially misleading misstatements, and (iii) access to confidential

proprietary information concerning IMH were informed of, participated in and

knew of the fraudulent scheme alleged herein. With respect to non-forward-

looking statements and/or omissions, Defendants knew and/or recklessly

disregarded the falsity and misleading nature of the information which they caused

to be disseminated to the investing public.

60. Defendants' false and misleading statements and omissions do not

constitute forward-looking statements protected by any statutory safe harbor. The

statements alleged to be false and misleading herein all relate to facts and

conditions existing at the time the statements were made. No statutory safe harbor

applies to any of the Defendants' material false or misleading statements.

61. Alternatively , to the extent that any statutory safe harbor is intended

apply to any forward-looking statement pled herein, the Defendants are liable for

the false forward-looking statement pled because, at the time each forward-looking

statement was made, the speaker knew or had actual knowledge that the forward-

looking statement was materially false or misleading, and the forward-looking

statement was authorized and/or approved by a director and/or executive officer of


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IMH who knew that the forward-looking statement was false or misleading. None

of the historic or present tense statements made by the Defendants was an

assumption underlying or relating to any plan, projection or statement of future

economic performance, as they were not stated to be such an assumption

underlying or relating to any projection or statement of future economic

performance when made nor were any of the projections or forecasts made by the

Defendants expressly related to or stated to be dependent on those historic or

present tense statements when made.

VII[. ADDITIONAL SCIENTER ALLEGATIONS

62. As alleged herein, the Defendants acted with scienter in that, inter

alia, the Defendants knew or acted with recklessness with respect to the fact that

the public documents and statements issued or disseminated in the name of IMH

were materially false and misleading; knew that such statements or documents

would be issued or disseminated to the investing public; and knowingly and

substantially participated or acquiesced in the issuance or dissemination of such

statements or documents as primary violations of the federal securities laws. As

set forth elsewhere herein, the Individual Defendants, by virtue of their receipt of

information reflecting the true facts regarding IMH, their control over and/or

receipt and/or modification of the allegedly materially misleading misstatements

and omissions described herein, which made them privy to confidential proprietary I


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information concerning IMH, directly and substantially participated in the

fraudulent scheme alleged herein.

63. Moreover, the ongoing fraudulent scheme described in this Complair

could not have been perpetrated over a substantial period of time, as has occurred,

without the knowledge of individuals at the highest levels of the Company,

including the Individual Defendants.

IX. APPLICABILITY OF PRESUMPTION OF RELIANCE: THEFRAUD-ON-THE- MARKET DOCTRINE

64. The market for IMH's securities was open, well-developed and

efficient at all relevant times for the following reasons (among others):

a. The Company' s shares met the requirements for listing, and

were listed and actively traded on NYSE;

b. As a regulated issuer, IMH filed periodic public reports with

SEC;

c. IMH regularly communicated with public investors via

established market communication mechanisms, including through regular

disseminations of press releases on the national circuits of major newswire servi

and through other wide-ranging public disclosures, such as communications with

the financial press and other similar reporting services;

d. The market reacted to public information disseminated by IMH;


1 C. IMH was followed by numerous material securities analysts

2employed by major brokerage firms who wrote reports which were distributed to

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4 the sales force and certain customers of their respective brokerage firms . Each of

5 these reports was publicly available and entered the public marketplace;

6f. The material misrepresentations and omissions alleged herein

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8 would tend to induce a reasonable investor to misjudge the value of IMH

9 securities; and

10g. Without knowledge of the misrepresented or omitted material

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12 facts , Plaintiff and the other members of the Class purchased or otherwise acquired

13 IMH securities between the time Defendants made the material misrepresentations

14and omissions and the time the fraudulent backdating was being disclosed,

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16 during which time the price of IMH securities was inflated by Defendants'

17 misrepresentations and omissions.

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1965. As a result of the foregoing , the market for IMH ' s securities promptly

20 digested current information regarding IMH from all publicly available sources

21 and reflected such information in IMH ' s securities prices. Under these

22circumstances , all purchasers and acquirers of IMH ' s securities during the Class

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24 Period suffered similar injury through their purchase or acquisition of IMH's

25 securities at artificially inflated prices and a presumption of reliance applies.

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X. LOSS CAUSATION

66. Throughout the Class Period, the prices of the Company's securities

were artificially inflated as a direct result of Defendants' fraudulent

misrepresentations regarding the Company's financial condition and results.

67. The Company' s financial condition and results were material

information to Plaintiff and the other members of the Class. Had the truth been

disclosed to the market at or before the end of the Class Period, Plaintiff and the

other Class members would not have purchased IMH stock at all, or would have

done so only at substantially lower prices than the artificially inflated prices which

they actually paid.

68. When the truth about the Company was revealed, the inflation that

had been caused by Defendants' misrepresentations and omissions was swiftly

eliminated from the price of the Company's securities, causing significant losses to

Plaintiff and the other Class members.

69. The decline in the Company's securities price following the

revelations of the Company' s fraudulent practices , and the resulting losses

by Plaintiff and the other members of the Class, are directly attributable to the

market's reaction to the disclosure of information that had previously been

misrepresented or concealed by Defendants, and to the market's adjustment of the

Company's securities price to reflect the newly emerging truth about the

Company' s financial condition.


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70. Defendants' fraudulent conduct, as alleged herein, proximately ca

foreseeable losses to Plaintiff and the other members of the Class.

XI. CAUSES OF ACTION

COUNT I

Violation of Section 10(b) of The Exchange ActAnd Rule 10b-5 Promulgated Thereunder

(Against all Defendants)

71. Plaintiff repeats and realleges each and every allegation contained

above as if fully set forth herein.

72. This Count is asserted by Plaintiff on behalf of itself and the Class

against all the Defendants and is based upon Section 10(b) of the Exchange Act, I

U.S.C. §78j(b), and Rule lOb -5, 17 C.F.R. §240. 1Ob-5, promulgated thereunder.

73. During the Class Period, the Defendants carried out a plan, scheme

and course of conduct which was intended to and, throughout the Class Period,

(1) deceive the investing public, including Plaintiff and other Class members, as

alleged herein; (ii) artificially inflate and maintain the market price of IMH's

securities; and (iii) cause Plaintiff and other members of the Class to purchase or

otherwise acquire IMH's securities at artificially inflated prices. In furtherance of

this unlawful scheme, plan and course of conduct, the Defendants, and each of

them, took the actions set forth herein.

74. The Defendants : (i) employed devices , schemes , and artifices to

defraud; (ii) made untrue statements of material fact and/or omitted to state


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material facts necessary to make the statements not misleading by use of means or

instrumentalities of interstate commerce; and (iii) engaged in acts, practices, and a

course of business which operated as a fraud and deceit upon the purchasers and

acquirers of the Company' s securities in an effort to maintain artificially high

market prices for IMH's securities in violation of Section 10(b) of the Exchange

Act and Rule lOb-5.

75. As a result of their making and/or their substantial participation in the

creation of affirmative statements and reports to the investing public, the

Defendants had a duty to promptly disseminate truthful information that would be

material to investors in compliance with the integrated disclosure provisions of the

SEC as embodied in SEC Regulation S-K (17 C.F.R. §229.10, et seq.) and other

SEC regulations, including accurate and truthful information with respect to the

Company's operations and performance so that the market prices of the

Company's publicly traded securities would be based on truthful, complete and

accurate information. The Defendants' material misrepresentations and omissions

as set forth herein violated that duty.

76. The Defendants engaged in the fraudulent activity described above

knowingly and intentionally or in such a reckless manner as to constitute willful

deceit and fraud upon Plaintiff and the Class. The Defendants knowingly caused

their reports and statements to contain misstatements and omissions of material

fact as alleged herein.


77. As a result of the Defendants' fraudulent activity, the market price of

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IMH was artificially inflated during the Class Period.

78. In ignorance of the true financial condition of IMH, Plaintiff and

members of the Class, relying on the integrity of the market and/or on the

statements and reports of IMH containing the misleading information, purchased

otherwise acquired IMH securities at artificially inflated prices during the Class

Period.

79. The market price of IMH's securities declined materially upon the

public disclosure of the true facts which had been misrepresented or concealed as

alleged herein.

80. Plaintiff's (and the Class') losses were proximately caused by

Defendants' active and primary participation in IMH's scheme to defraud the

investing public by, among other things, falsifying the Company's finances and

operations. Plaintiff (and the members of the Class) purchased IMH securities in

reliance on the integrity of the market price of those securities, and Defendants

manipulated the price of IMH securities through their misconduct as described

herein. Furthermore, Defendants' misconduct proximately caused Plaintiff's (and

the Class') losses. Plaintiff's (and the Class') losses were a direct and foreseeable

consequence of Defendants' failure to disclose and their concealment of, inter aliaj

the true state of the business operations and financial condition of IMH.


81. Throughout the Class Period, Defendants were aware of material non-

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public information concerning IMH's fraudulent conduct (including the false and

misleading accounting statements). Throughout the Class Period, Defendants

willfully and knowingly concealed this adverse information regarding IMH's

falsified revenue figures, and Plaintiff's (and the Class') losses were the

foreseeable consequence of Defendants' concealment of this information.

82. As a direct and proximate cause of the Defendants' wrongful conduct,

Plaintiff and other members of the Class suffered damages in connection with their

respective purchases and sales of IMH securities during the Class Period.

COUNT II

Violation of Section 20(a) of the Exchange Act

(Against the Individual Defendants)

83. Plaintiff repeats and realleges each and every allegation contained

above as if fully set forth herein.

84. As alleged herein, the Individual Defendants acted as controlling

persons of IMH within the meaning of Section 20(a) of the Exchange Act, 15

U.S.C. §78t(a). By virtue of their executive positions , and/or Board membership,

as alleged above, these individuals had the power to influence and control and did

influence and control, directly or indirectly, the decision-making of the Company,

including the content and dissemination of the various statements which Plaintiff

contends are false and misleading. The Individual Defendants were provided with


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or had unlimited access to copies of the Company's internal reports, press releases,

public filings and other statements alleged by Plaintiff to be misleading prior to

and/or shortly after these statements were issued and had the ability to prevent the

issuance of the statements or cause the statements to be corrected.

85. In particular, the Individual Defendants had direct involvement in the

day-to-day operations of the Company and therefore , are presumed to have had the

power to control or influence the particular transactions giving rise to the securities

violations as alleged herein, and exercised the same.

86. As set forth above, the Individual Defendants and IMH committed a

primary violation of Section 10(b) and Rule I Ob-5 of the Exchange Act by the acts

and omissions alleged in this Complaint. By virtue of their positions as controlling

persons of IMH, the Individual Defendants are liable pursuant to Section 20(a) of

the Exchange Act. As a direct and proximate result of the Individual Defendants'

wrongful conduct, Plaintiff and the other members of the Class suffered damages

in connection with their purchase or acquisition of IMH securities during the Class

Period.

XIV. PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for relief and judgment, as follows:

A. Determining that this action is a proper class action;

B. Awarding compensatory damages in favor of Plaintiff and the other

class members against all Defendants, jointly and severally, for all damages


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sustained as a result of the Defendants' wrongdoing, in an amount to be proven at

trial, including interest thereon;

C. Awarding Plaintiff and the Class their reasonable costs and expenses

incurred in this action, including counsel fees and expert fees; and

D. Awarding such other and further relief as the Court may deem just

I proper.

XV. JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury on all claims set forth herein.

Dated : August 17, 2007

GLANCY BINKOW & GOLDBERGLLP

By:Lionel Z. Glancy

1801 Ave. of the Stars, Suite 311Los Angeles, California 90067Tel: 310-201-9150Fax: 310-201-9160

Mark C. GardyGARDY & NOTIS, LLP440 Sylvan Avenue, Suite 110Englewood Cliffs, New Jersey 07632Tel: 201-567-7377Fax: 201-567-7337


) )t

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Nadeem FaruqiFARUQI & FARUQI, LLP369 Lexington Avenue, 10th FloorNew York, New York 10017-6531Tel: 212-983-9330Fax: 212-983-9331

Counsel for Plaintiff


08/17/2007 11:40 FAX 954 267 5698 MORGAN STANLEY 4002I

CERTIFICATION OF PROPOSED LEAD PLUM"

that:

1. 1 have reviewed the complaint and authorized its Ming.

2. X did not purchase the security that is the subject of this action (ImpacMortgage Holdings, Inc (NYSE: D&-I)) at the direction of plaintiff's counsel , or in order toparticipate in any private action arising under this title.

3. 1 am willing to serve as a representative party on behalf of a class and willtestify at deposition andfrial , if necessary.

4- My transactions in the security that is the subject of this litigation daring theclass period set forth in the complaint are as follows:

Purchases:Date.

C^CShares Boukht Price Per Share

• rt b ` (`- ( - 14. !5 ' r7 j 1 L r Yt

3/044

'31iflS

tip,a es ( any) .

Date Shares S613 P'rtce Per Share

L- 1 iii C"q 1 oo ^i,-?/

5. 1 have not served as or sought to serve as a representative party on behalf ofa class under this title during the last three years.

6. I will not accept any payment for serving as a representative party, except toreceive my pro rata share of any recovery or as ordered or approved by the court includingthe award to a representative of reasonable costs and expenses (including lost wages)directly relating to the representation of the class.

The foregoing are, to the best of my knowledge/eJ! true and correctstatements. ,

Documents

Sheldon Pittleman, et al. v. Impac Mortgage Holdings, …securities.stanford.edu/filings-documents/1038/IMH_01/...OTTIER S1'AIUTES CQNCRI^CT T 1 T5 jOk! f'R15019FIt-• I A1SC9R•