Reinhardt & Anderson Announces Notice of Pendency of Class Action Lawsuit Filed Against Imperial Credit Industries, Inc. and Certain Officers and Directors.

ST. PAUL, Minn.--(BUSINESS WIRE)--Nov. 2, 1998--ALL INSTITUTIONS AND INDIVIDUALS ARE HEREBY NOTIFIED that a class action lawsuit was filed in the United States District Court Central District of California on behalf of all purchasers of Imperial Credit Industries NASDAQ:ICII; ("Imperial Credit" or the "Company") common stock during the period January, 29, 1998 through and including September 14, 1998 (the "Class Period").

The Complaint alleges that Imperial Credit and certain officers and directors of the Company during the Class Period violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

The Complaint charges that the defendants engaged in a fraudulent scheme to artificially inflate the price of Imperial Credit common stock through the issuance of a series of material false and misleading statements concerning the value of Imperial Credit's investment in, and equity interest in the earnings of, Southern Pacific Funding Corporation. The Complaint further alleges that as Southern Pacific Funding's controlling shareholder (owning 47% of Southern Pacific's common stock) and at the direction of Imperial Credit, Southern Pacific Funding made false and misleading statements relating to its reported revenue and income which were artificially inflated as the result of overly aggressive and improper accounting practices in violation of Generally Accepted Accounting Principles. Specifically, the Complaint alleges that the defendants knew or recklessly disregarded that the loan prepayment assumptions on which Southern Pacific Funding's gain on sale revenue were predicated were grossly inconsistent with Southern Pacific Funding's actual prepayment experience.

As the consequence of defendants' scheme, the price of Southern Pacific Funding common stock was artificially inflated to over $18 per share. With price of Southern Pacific Funding's shares artificially inflated, it is alleged that defendants shopped its holdings in Southern Pacific Funding around in order to take advantage of the artificially inflated price at which Southern Pacific Funding common stock was then trading. Suddenly, on September 14, 1998 and before Imperial Credit was able to dump its holdings of Southern Pacific Funding, the defendants scheme unraveled as it was revealed that Southern Pacific Funding was considering a write-down in the value of its residual assets which would result in earnings substantially below that which the investment community had earlier been lead to expect. As a result of this disclosure, the price of Southern Pacific Funding's shares plummeted, trading as low as $4 1/16 by the close of trading on September 14, 1998 and further declining below $3 the following trading session. As a result of this disclosure and drop in Southern Pacific Funding's share price, Imperial Credit common stock plummeted too, trading as low as $7 1/2, well below its class period high of over $25 per share. On October 1, 1998, Southern Pacific Funding announced that it had filed for protection under Chapter 11 of the United States Bankruptcy Code.

Plaintiff seeks to recover damages from the Company and the officers and directors named as defendants and is represented by the law firm of Reinhardt & Anderson. Reinhardt & Anderson devotes its practice to securities, antitrust and consumer class actions and has recovered hundreds of millions of dollars on behalf of defrauded investors and consumers in class actions throughout the United States.

If you are a member of the Class described above, you may, no later than sixty days from today move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Randall H. Steinmeyer of Reinhardt & Anderson by telephone at 888/253-5139 or 612/227-9990, by facsimile at 612/297-6543, or by e-mail at [e-mail].