(To read more on the debt and equity markets, click here.)

PHILADELPHIA-A securities fraud class action complaint has been filed against GMH Communities Trust and two of its principals with the US District Court for the Eastern District of Pennsylvania. The complaint alleges that the defendants "embarked on a scheme to inflate the earnings of the company and to issue dividends in violation of loan covenants in order to drive the price of the stock higher."

The complaint was initiated by a person, identified in the document as Iris Martin, who purchased securities of GMH when the Newtown Square-based student and military housing specialty REIT made its initial public offering in October 2004 and is filed on behalf of her, individually, and "all others similarly situated." The latter applies to people who purchased securities of GMH during the "class period" of between Oct. 24, 2004 and March 10, 2006. The locally based law firm of Berger & Montague PC is representing the plaintiff.

The higher stock price, according to the complaint, "allowed the company to sell a secondary offering in October 2005 on more favorable terms. Defendants were able to accomplish their scheme by issuing a series of false and misleading financial results to the market. …Unbeknownst to the market, the company's strong earnings were the result of accounting manipulations," the suit alleges.