Bankrupt Student Lender Sued Over ARS Involvement

Law360, New York (April 21, 2009, 12:00 AM EDT) -- An investor has launched a proposed class action against the executive officers of bankrupt student lender MRU Holdings Inc., alleging the defendants lied about the market for student loan-backed auction rate securities in order to generate enough capital to originate more loans and collect fees.

In a complaint filed April 15 in the U.S. District Court for the Southern District of New York, Jake Vale claims that four former MRU executives violated the Securities Exchange Act of 1934 by failing to disclose that the market for...
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