FBI/SEC Investigation Adds To Countrywide’s Woes
New York Times: Countrywide Financial is on the receiving end of a federal securities fraud investigation.
Little information is available at this early stage, but the investigation is about whether Countrywide misrepresented its financial health in its SEC filings. Cold comfort to Countrywide borrowers who lost their homes, but both the FBI and SEC are involved in what is only the latest in a string of legal and financial problems that may prove fatal to Countrywide’s existence or to its pending acquisition by Bank of America. The Financial Times reported that BoA is experiencing political pressure to discontinue the acquisition.
Advertisement
Okay, the SEC investigation won't help home borrowers but it might help some investors, including mutual funds and pension funds who were tricked into buying Countrywide stock.
Not sure why Schumer would want to stop the sale to BofA, though. BofA would take on all of Countrywide's liabilities, including potential stock fraud penalties and judgments. Without BofA Countrywide is toast. After the acquisition, burned Countrywide shareholders would at least be able to sue the much larger BofA for compensation.
March 10, 2008 9:48 AM | Reply | Permalink
It seems like the way our system works is after an obvious deception that involves money the investor's interest does get considered. The consumer is left to his or her own struggles and/or demise. What is needed is putting back in the financial system some resonable regulations that helps stop the greed that always seeps into
an uncontrolled financial market. So I hope that if Countrywide and others are guilty of deception then let them pay the price. Our Republic's Commonwealth must be protected much better than what has been occuring for the last twenty years.
Of course any thinking person understands that the financial pressure of the Iraq Occupation has helped set up this subprime disaster.
March 10, 2008 10:42 AM | Reply | Permalink