SOURCE: Saxena White

April 16, 2008 17:00 ET

Saxena White P.A. Files Shareholder Suit on Behalf of Institutional Investor Against First Marblehead Corporation

BOCA RATON, FL--(Marketwire - April 16, 2008) - Notice is hereby given that Saxena White P.A. has filed suit on behalf of shareholders of The First Marblehead Corporation. ("First Marblehead" or the "Company") (NYSE: FMD) in the United States District Court for the District of Massachusetts.

The complaint, filed on behalf of Sheetmetal Workers Local 28 Pension Fund, seeks damages for violations of federal securities laws on behalf of all investors who purchased First Marblehead securities between August 10, 2006 through April 7, 2008, inclusive (the "Class Period"). First Marblehead provides outsourcing services for private education lending in the United States. Throughout the Class Period, Defendants reported quarter after quarter of seemingly strong financial results and touted the Company's ability to complete additional securitizations despite a difficult operating environment in the lending industry. As a result of Defendants' statements, the stock traded as high as $57.56 per share during the Class Period.

The veracity of defendants' Class Period statements was first called into question on November 26, 2007. At that time, Friedman, Billings, Ramsey downgraded First Marblehead to under-perform from market-perform, citing an increased risk that loss reserves associated with securitization might not be sufficient. This meant that the previously reported value of First Marblehead's back-end rights and all management-supplied estimates of future earnings were in jeopardy.

On December 4, 2007, Moody's Investors Service announced that it was performing a review of the Company and that it might lower ratings on $822 million of securities created by First Marblehead from 2003 through 2007. Subsequently, on March 26, 2008, Moody's downgraded 18 classes of notes in 11 First Marblehead student loan securitizations, affecting approximately $1.09 billion of the Company's asset-backed securities.

On April 8, 2008, First Marblehead lost over a third of its value after The Education Resources Institute, Inc. ("TERI"), the Company's guarantor of private student loans, filed for bankruptcy protection. As a result, the Company may incur substantial losses arising from defaults on its student loans. After the TERI bankruptcy announcement, First Marblehead's stock sank to $4.89, a decline of 36.5% from the day before. The Company's stock had already fallen 50 percent in the several months since the truth of its precarious financial position was finally revealed.

You may obtain a copy of the complaint from the Court, by contacting Saxena White P.A. through its website www.saxenawhite.com, by emailing jwhite@saxenawhite.com or gstone@saxenawhite.com or by calling (561) 394-3399.

If you acquired First Marblehead's securities from August 10, 2006 through April 7, 2008, you may wish to contact Joe White or Greg Stone at Saxena White P.A. to discuss your rights and interests.

If you wish to apply to be the lead plaintiff in this action, a motion on your behalf must be filed with the court no later than June 9, 2008. You may contact Saxena White P.A. to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. Please note that you may also retain counsel of your choice and need not take any action at this time to be a class member.

Saxena White P.A. has offices in Boca Raton, San Francisco, and Boston, and specializes in prosecuting securities fraud and complex class actions on behalf of institutions and individuals. Currently serving as lead counsel in numerous securities fraud class actions nationwide, the firm has recovered millions of dollars on behalf of injured investors.

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