Federal Court Upholds Derivative Complaint Alleging Federal and State Law Claims Against Countrywide Officers and Directors, Acc
May 15 2008 - 5:11PM
Marketwired
SAN DIEGO, CA issued an important ruling today upholding, in
large part, the plaintiffs' claims against certain officers and
directors of the Company. The action alleges breaches of fiduciary
duty by Countrywide's officers and directors, including Angelo
Mozilo and David Sambol, as well as violations of the federal
securities laws. The derivative action is led by a group of
institutional investors, including Arkansas Teacher Retirement
System, Fire & Police Pension Association of Colorado,
Louisiana Municipal Police Employees Retirement System, Central
Laborers Pension Fund, and the Mississippi Public Employees
Retirement System.
Among other things, the Court held that "[p]laintiffs'
allegations create a cogent and compelling inference that the
Individual Defendants misled the public with regard to the rigor of
Countrywide's loan origination process, the quality of its loans,
and the Company's financial situation -- even as they realized that
Countrywide had virtually abandoned its own loan underwriting
practices." Furthermore, the Court stated that "the idea that a
Company-wide culture that encouraged unchecked deviations from
underwriting standards in a way which would fatally affect the
Company's continued financial performance went unnoticed by the
Board of Directors simply does not square with the specific and
comprehensive monitoring duties of the members of the Board."
"The Court's ruling is a critically important step in enabling
Countrywide and its shareholders to hold accountable the officers
and directors who looted the Company and were responsible for its
devastating collapse," said Blair A. Nicholas, a partner with
Bernstein Litowitz Berger & Grossmann LLP, co-lead counsel for
the institutional investor plaintiffs. "The Court's Order will
enable these sophisticated Lead Plaintiff shareholders, who have
conducted an extensive investigation of the Countrywide debacle, to
formally demand answers from Countrywide's officers and directors
as to why they caused the Company to commence a billion dollar
share repurchase program while at the same time selling their own
shares to the public," stated Mr. Nicholas.
Copies of the Court's decision, as well as the operative
complaint can be found at
www.blbglaw.com/cases/countrywide_derivative.html
CONTACT: Bernstein Litowitz Berger & Grossmann LLP, San
Diego, CA Blair A. Nicholas (858)-720-3183 blairn@blbglaw.com
www.blbglaw.com
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