June 13, 2013 – Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has been investigating PennyMac Mortgage Investment Trust (“PennyMac Mortgage”) (NYSE: PMC), Stanford L. Kurland (“Kurland”), PennyMac’s CEO and Chairman, and PennyMac Financial Services (“PennyMac Financial”) for potential conflicts of interest and violations of the federal securities laws. Investors who purchased or acquired shares of PennyMac Mortgage may be affected.
On May 18, 2013, the New York Times published an article entitled “Dueling Jobs (and Big Paydays)” reporting that PennyMac CEO and Chairman, Kurland, who later founded PennyMac Financial, was reaping numerous financial benefits for himself and PennyMac Financial at the expense of the PennyMac Mortgage and PennyMac Mortgage shareholders. PennyMac Financial, also under Kurland’s control, not only earns lucrative fees from PennyMac Mortgage by operating a mortgage servicing unit and an investment adviser that manages the PennyMac Mortgage REIT, but also uses PennyMac Mortgage to generate business opportunities and profits for PennyMac Financial that, according to the New York Times, rightfully belong to PennyMac Mortgage.
One example given of the many non-arms length transactions reportedly occurring between the two entities is that PennyMac Financial buys most of its mortgage loans from PennyMac Mortgage at cost plus 0.03 percent and then turns around and sells those mortgages at a profit. In 2012, PennyMac Financial reportedly generated $118 million on loans it sold. To the extent these gains were on loans that originated at PennyMac Mortgage, those profits reportedly should have been received by PennyMac Mortgage. As a result, according to the New York Times, PennyMac Financial Services shareholders returns on investment are far higher than for PennyMac Mortgage shareholders.
If you purchased shares of PennyMac Mortgage (NYSE: PMC) and would like to discuss our investigation, please e-mail us at
Attorneys: Frederic S. Fox, Laurence D. King, Donald R. Hall, Jeffrey P. Campisi, Pamela A. Mayer