NY Pension Funds to Lead Countrywide Class-Action

December 3, 2007 (PLANSPONSOR.com) - Two New York pension funds will take the lead in a class-action suit against Countrywide Financial.

U.S. District Judge Mariana Pfaelzer in Los Angeles last week appointed New York State Comptroller Thomas DiNapoli (who oversees the New York State Common Retirement Fund) and the New York City Pension Funds as co-lead plaintiffs in five class-action lawsuits accusing Countrywide Financial Corp, the largest U.S. mortgage lender, of inflating earnings and overstating its ability to weather the housing slump.   According to Reuters, Judge Pfaelzer found that the pension funds, with a combined loss of “over $100 million,” had the largest stake of any prospective lead plaintiff, and that the funds had considerable experience in similar cases.  

The plaintiffs accuse Calabasas, California-based Countrywide of misleading investors about its lending practices, overstating its ability to weather the nation’s housing downturn, and inflating income by understating loan loss reserves, according to Thompson and court records.

Defendants in the lawsuits also include Mozilo, Chief Operating Officer David Sambol and his predecessor Stanford Kurland, Chief Financial Officer Eric Sieracki, and others.