Imperial Holdings(IFT) lost well more than half of its market capitalization Wednesday as investors crowded the exits in the wake of a raid of the company's offices by federal authorities.
The Boca Raton, Fla.-based company, which provides loans and cash payments based on life insurance policies and structured settlements, acknowledged late Tuesday it was served with a search warrant by the U.S. District Court of the Southern District of Florida, saying it fully cooperated with the exercise of the warrant.
Imperial further disclosed that both the company and certain employees, including its chairman and CEO Antony Mitchell, are being investigated by the District of New Hampshire, and that the probe relates to its life finance business. Perhaps coincidentally, the "How it Works" section for the company's life finance business on its Web site is currently listed as Under Construction.
The stock closed Wednesday, down over 70% on the day. Earlier in the session, the shares sank as low as $1.55. At current levels, the company's market cap is a little more than $50 million.
"Today's action comes as a complete surprise," said CEO Mitchell in the company's prepared statement. "We are not aware of any wrongdoing and will cooperate fully with all relevant authorities to assist them in their investigation."
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