Countrywide Financial Corporation Agreed to Class Action Settlement
August 2010 - If, between March 12, 2004 and March 7, 2008, inclusive (the “Class Period”), you purchased or acquired Countrywide Financial Corporation common stock, call options, 6.25% Subordinated Notes Due 5/15/2016, Series A Medium-Term Notes, Series B Medium-Term Notes, certain Series L Medium-Term Notes, certain Series M Medium-Term Notes, and/or Countrywide Capital V 7% Capital Securities, or you sold Countrywide put options during the Class Period, and you were damaged thereby, then you may be entitled to receive money from a class action settlement.
Judge Mariana R. Pfaelzer granted the motion for preliminary approval of the settlement. A Fairness Hearing will be held on Monday, November 15, 2010 at 1:00 p.m. to determine, among other things, (a) whether the proposed Settlement of the Action on the terms and conditions provided in the Settlement Agreement is fair, reasonable, and adequate and should be approved by the Court; (b) whether the proposed Plan of Allocation of the Net Settlement Fund is fair and reasonable and should be approved by the Court; (c) whether a Final Judgment and Order of Dismissal with Prejudice substantially in the form of Exhibit B to the Settlement Agreement should be entered in this Action; and (d) to consider Plaintiffs' Lead Counsel's application for a Fee and Expense Award.
December 2007 - The original complaint alleges that defendants made false and misleading statements and material omissions regarding the Company's business and operations and that, as a result, the price of the Company's securities was inflated during the Class Period, thereby harming investors.
Specifically, according to the complaint, during the Class Period, defendants made false and misleading statements regarding the changing quality of the Company's mortgage loan portfolio. As late as April of 2007, the Company stated that credit rating agency Moody's upgraded the rating of the Company's banking segment and announced that its home loans segment was also under review for possible upgrade. Then, on June 12, 2007, the Company boasted of its position as the number one mortgage originator in the United States. These reassuring announcements served to conceal the alarming growth of loan delinquencies and the increasing likelihood of impairment charges, with resulting adverse impacts on the quality of the Company's collateralized debt obligations (CDO's), earnings and profits.
The complaint further alleges that on July 24, 2007, the Company finally announced the shocking news, of over $417 million in impairment charges and implementation of a $292.9 million loan loss provision. On the news, the price of Countrywide Financial stock tumbled 10.4%, closing at $30.50 per share. Following this, on August 9, 2007, within four days of reassuring statements that purported the reliability and availability of liquidity to meet short-term needs, the Company adopted a new risk disclosure, warning of short-term liquidity issues. As a result, on that day, the price of Countrywide Financial stock fell again, losing $1.00 or 3.4%, to close at $27.86 per share, on heavy volume of over 48.6 million shares.