NY Funds Reach Countrywide Suit Agreement

May 7, 2010 (PLANSPONSOR.com) – A $624-million settlement has been reached between New York State and New York City pension funds and Countrywide Financial Corp.

A news release from law firm Labaton Sucharow said Countrywide would pay plaintiffs $600 million and the accounting firm KPMG would pay $24 million. The deal was reached on behalf of the New York State Common Retirement Fund and five New York City public pension funds.

The proposed settlement is expected to go before U.S. District Judge Mariana R. Pfaelzer of the U.S. District Court for the Central District of California for preliminary approval.

The plaintiffs had alleged that Countrywide, one of the country’s largest mortgage lenders, violated securities laws by making misstatements and omitting material facts about its policies and procedures for underwriting loans that entailed greater risk than disclosed (see NY Pension Funds to Lead Countrywide Class-Action).