Pension Fund Sues Countrywide Officers

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The chief executive of Countrywide Financial, Angelo R. Mozilo, has been sued by a pension fund that accused the company of helping executives pocket improper gains by artificially inflating its stock price through share buybacks, the New York Times reports.


The pension fund, the New England Teamsters and Trucking Industry Pension Fund, accused Mr. Mozilo, other Countrywide executives and its board of gross mismanagement for improperly using $2 billion in cash to repurchase stock.


It said the move allowed executives to sell shares of Countrywide worth $842 million at artificially high prices from April 2004 to October 2007, at the expense of ordinary shareholders.


Countrywide had no immediate comment on the lawsuit.


The lawsuit, filed Monday in Los Angeles Superior Court, cited news reports that insider share sales at Countrywide reached a five-year peak in March, four months before the company posted a 33 percent drop in second-quarter earnings and cut its full-year earnings forecast.


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