Former First Magnus Officers, Directors to Leave StoneWater

StoneWater Mortgage Corp., Tucson, Ariz., is "restructuring" its management team in the wake of a lawsuit filed against several members who had been part of the officers and directors of First Magnus Corp. Karl F.W. Young, president of StoneWater, in a statement said he and the others named in the suit would be stepping aside to focus their attention on defending themselves against the allegations while allowing StoneWater to continue without the distractions associated with it. The changes are effective on May 1. First Magnus Litigation Trust trustee Larry Lattig filed the suit. Among the 40 defendants named besides Mr. Young are Gurpreet Jaggi, former president and chief executive of First Magnus; Thomas Sullivan Sr., former chairman of First Magnus; Thomas Sullivan Jr., former vice president of First Magnus; Bill Gaylord, a former officer of First Magnus; Gary Malis, former chief financial officer of First Magnus and currently managing director of capital markets for StoneWater; and Dominick Marchetti, former First Magnus chief technology officer and current managing direct of loan production at StoneWater. Mr. Lattig alleges the seven men stripped $300 million from First Magnus to start StoneWater. The person answering a call at StoneWater for further details about the management change responded that the company was not answering media inquiries at this time.