Countrywide Financial Corporation (NYSE: CFC) Investor Securities Class Action Lawsuit 08/14/2007

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Company Name(s): 
Countrywide Financial Corporation
Case Name: 
Countrywide Financial Corporation Shareholder Class Action Lawsuit 08/14/2007 08/14/2007
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NYSE: CFC
Lawsuit Overview
Date Filed: 
08/14/2007
Class Period Begin: 
03/12/2004
Class Period End: 
03/07/2008
Court of Filing: 
U.S. District Court for the Central District of California
Deadline To File for Lead: 
10/15/2007
Date Settled: 
03/04/2011
Settlement Amount: 
$624,000,000
Deadline to Participate in Settlement: 
02/14/2011
Summary: 

May 28, 2013 - The U.S. Court of Appeals for the Ninth Circuit ordered the judgment of the district court is affirmed.

November 8, 2012 - The court ordered the authorization of the distribution of the net settlement fund.

April 4, 2011 - An objector filed a notice of appeal.

March 4, 2011 - The court approved the settlement, entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and and dismissed the action with prejudice.

January 7, 2011 - The court preliminarily approved the amendment to the amended settlement.

January 4, 2011 - Parties filed an amendment to the amended stipulation of settlement.

August 2, 2010 - The court preliminarily approved the amended settlement.

June 29, 2010 - Parties filed an amended stipulation of settlement.

June 4, 2010 - Parties filed a stipulation of settlement.

September 4, 2009 - The court granted the motion to dismiss of Count VII of the second amended complaint as to a particular defendant.

August 18, 2009 - The court ordered the dismissal of all claims against a particular defendant with prejudice.

April 6, 2009 - The court issued an omnibus order granting in part particular individual defendants' numerous motions to dismiss with prejudice and denying in part other motions to dismiss.

February 6, 2009 - The defendants filed numerous motions to dismiss.

January 7, 2009 - The lead plaintiffs filed a second amended complaint.

December 1, 2008 - The court issued an omnibus order granting dismissal of some counts against particular defendants without prejudice and denying in part numerous defendants' motions to dismiss.

June 10, 2008 - The defendants filed numerous motions to dismiss.

April 11, 2008 - The lead plaintiffs filed an amended complaint on behalf of investors who purchased or otherwise acquired the publicly traded common stock Countrywide Financial Corporation (NYSE: CFC) or other equity securities, debt securities, or call options of or guaranteed by Countrywide Countrywide Financial Corporation, or sold Countrywide Financial Corporation put options between March 12, 2004 and March 7, 2008. The lead plaintiff alleges that the defendants violated the Securities Act of 1933 and the Securities Exchange Act of 1934 by issuing false and misleading statements between March 12, 2004 and March 7, 2008.

March 28, 2008 - The court ordered additional cases consolidated.

November 28, 2007 - The lead plaintiffs and lead counsel were appointed and all cases were consolidated.

November 7, 2007 - A lead plaintiff motion was filed.

August 14, 2007 - An investor in shares of Countrywide Financial Corporation (NYSE: CFC) filed a lawsuit in the U.S. District Court for the Central District of California against Countrywide Financial Corporation over alleged violations of Federal Securities Laws.

The complaint alleges, between October 24, 2006 and August 9, 2007, defendants made false and misleading statements regarding the changing quality of Countrywide Financial Corporation's mortgage loan portfolio. As late as April of 2007, Countrywide Financial Corporation stated that credit rating agency Moody's upgraded the rating of Countrywide Financial Corporation's banking segment and announced that its home loans segment was also under review for possible upgrade. Then, on June 12, 2007, Countrywide Financial Corporation 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 Countrywide Financial Corporation's collateralized debt obligations (CDO's), earnings and profits.

The complaint further alleges that on July 24, 2007, Countrywide Financial Corporation 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 Corporation stock (NYSE: CFC) 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, Countrywide Financial Corporation adopted a new risk disclosure, warning of short-term liquidity issues. As a result, on that day, the price of Countrywide Financial Corporation 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.