New York Expands Countrywide Class Action Suit

Today, New York City and state expanded their class action lawsuit against Countrywide Financial Corp. to include two more company officers, twenty underwriters (including big investment banks like Goldman Sachs, J.P. Morgan and Merrill Lynch), and two accounting firms. “We will pursue every avenue to ensure that those who defrauded investors are held accountable for their actions,” said the NYC Comptroller.

Executives of Countrywide “cashed out to the tune of almost $700 million” while borrowers lost homes and the value of investors’ shares fell sharply, [NYC Comptroller] Thompson said in a statement.

“Countrywide’s underwriters had a duty to investigate whether Countrywide was acting honestly,” [NY State Comptroller] DiNapoli said. “Instead, the underwriters and accountants enabled Countrywide to release false statements.”

“NY expands Countrywide suit with more defendants” [Reuters]
(Photo: sbfisher)

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