Link:
http://www.jsmineset.com/
Snippet: There Is Big Trouble Ahead For This Corporation and it's purchaser Bank Of America.
May 15, 2008
Judge Says Countrywide Officers Must Face Suit by Shareholders
By GRETCHEN MORGENSON
Directors and officers of Countrywide Financial, the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in California has ruled.
Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.”
Plaintiffs also identified “numerous red flags” that would have warned directors of increasingly risky loans made by Countrywide, according to the judge, who rejected a motion to dismiss the suit. “It defies reason, given the entirety of the allegations,” Judge Pfaelzer wrote, “that these committee members could be blind to widespread deviations from the underwriting policies and standards being committed by employees at all levels. At the same time, it does not appear that the committees took corrective action.”
Hundreds of mortgage companies have failed in the last year or so, but few executives or directors have taken responsibility. That makes the ruling significant, said Blair A. Nicholas, one of two lawyers at Bernstein Litowitz Berger & Grossmann representing the plaintiffs.
“It is a critical step enabling Countrywide and its shareholders to hold accountable the officers and directors who looted the company and were responsible for its devastating collapse,” Mr. Nicholas said.
Countrywide shareholders have lost billions of dollars since 2007 when its shares hit a high of $45.03. They closed on Wednesday at $4.85.
There is new material posted there on Saturday which is quite informative. Please have a look.
I hope everyone is having a fine weekend.
Bruce
http://www.jsmineset.com/
Snippet: There Is Big Trouble Ahead For This Corporation and it's purchaser Bank Of America.
May 15, 2008
Judge Says Countrywide Officers Must Face Suit by Shareholders
By GRETCHEN MORGENSON
Directors and officers of Countrywide Financial, the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in California has ruled.
Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.”
Plaintiffs also identified “numerous red flags” that would have warned directors of increasingly risky loans made by Countrywide, according to the judge, who rejected a motion to dismiss the suit. “It defies reason, given the entirety of the allegations,” Judge Pfaelzer wrote, “that these committee members could be blind to widespread deviations from the underwriting policies and standards being committed by employees at all levels. At the same time, it does not appear that the committees took corrective action.”
Hundreds of mortgage companies have failed in the last year or so, but few executives or directors have taken responsibility. That makes the ruling significant, said Blair A. Nicholas, one of two lawyers at Bernstein Litowitz Berger & Grossmann representing the plaintiffs.
“It is a critical step enabling Countrywide and its shareholders to hold accountable the officers and directors who looted the company and were responsible for its devastating collapse,” Mr. Nicholas said.
Countrywide shareholders have lost billions of dollars since 2007 when its shares hit a high of $45.03. They closed on Wednesday at $4.85.
There is new material posted there on Saturday which is quite informative. Please have a look.
I hope everyone is having a fine weekend.
Bruce
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