Fremont Sued, Hires Auditor

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Fremont General Corp. employees have filed a federal lawsuit against the company, claiming they lost millions of dollars on company stock in their retirement plan while executives sold off millions of shares to stave off big losses.


The complaint, which is seeking class-action status, names nine company directors and claims that the troubled sub-prime lender’s board should have foreseen and prevented the losses.


The suit, filed in U.S. District Court in Los Angeles, alleges company Chairman James McIntyre sold $11 million worth of company stock last summer while four other directors sold $5.5 million in stock in 2007. The suit did not specify damages being sought.


The legal action comes after Fremont announced Wednesday that it hired its third auditor in less than a year. Grant Thornton LLP resigned in late March as auditor for Fremont.


Fremont said that Squar, Milner, Peterson, Miranda & Williamson LLP will finish the audit of its overdue 2006 financial statements. Fremont has postponed its annual meeting given its lack of a certified annual report.


Shares of Fremont were down 10 cents to $8.03 in afternoon trading Thursday on the New York Stock Exchange.

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