Judge drops class-action suit against NovaStar – Kansas City Business Journal:

A federal judge in the Westerhn District of Missouri has dismissed asecurities class-actiob lawsuit against the company. In a June 4 Judge Ortrie Smith found that the amendedd complaint against theKansas City-basede subprime lender missed several procedural filinv requirements. The 110-page lawsuit had claimed that NovaStar had misledf investors with its public news releases and filings up to the poin before itsstock collapsed, leading the lender to arrive at its currenty state of bordering on bankruptcy.
Specifically, the lawsuit, whicj originated in California, alleged that the company didn'f disclose that it had failecd internal controls and that the company had establishex larger reservesfor re-purchaser obligations on sales of loansw to third parties, among other complaints about the But Smith found that despite its the filing didn't include enoughb specifics and rather painted a broad picture of the overall health of the company, which legally isn't enough to brin g a complaint.
"Plaintiff discusses his claime ingeneralities — precisely what the (Private Securitiew Litigation Reform Act) counsels against," Smith's opinion "This has allowed plaintiff to pick isolatex threads and snippets from the complainy to create an illusion of detail and insinuate the existencde of fraud, which in turn has made it exceedinglyt difficult for the court to conduct the analysis required by Darren Robbins, a San Diego lawyer leading the class-actioh lawsuit, could not be reached for comment.
Smith'd opinion didn't leave the door open for an amended complaint, saying "such an effort would be because the lawsuiteither couldn't do a better job of framing the complainft or didn't think Smith would figure that the complain was inadequate.
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