Federal Court Upholds Derivative Complaint Alleging Federal and State
Law Claims Against Countrywide Officers and Directors, According to
Bernstein Litowitz Berger & Grossmann LLP
SAN DIEGO, CA--(Marketwire - May 15, 2008) - The federal district
court overseeing a derivative action concerning the collapse of
Countrywide Financial Corporation (NYSE: CFC) issued an important
ruling today upholding, in large part, the plaintiffs' claims against
certain officers and directors of the Company. The action alleges
breaches of fiduciary duty by Countrywide's officers and directors,
including Angelo Mozilo and David Sambol, as well as violations of
the federal securities laws. The derivative action is led by a group
of institutional investors, including Arkansas Teacher Retirement
System, Fire & Police Pension Association of Colorado, Louisiana
Municipal Police Employees Retirement System, Central Laborers
Pension Fund, and the Mississippi Public Employees Retirement System.
Among other things, the Court held that "[p]laintiffs' allegations
create a cogent and compelling inference that the Individual
Defendants misled the public with regard to the rigor of
Countrywide's loan origination process, the quality of its loans, and
the Company's financial situation -- even as they realized that
Countrywide had virtually abandoned its own loan underwriting
practices." Furthermore, the Court stated that "the idea that a
Company-wide culture that encouraged unchecked deviations from
underwriting standards in a way which would fatally affect the
Company's continued financial performance went unnoticed by the Board
of Directors simply does not square with the specific and
comprehensive monitoring duties of the members of the Board."
"The Court's ruling is a critically important step in enabling
Countrywide and its shareholders to hold accountable the officers and
directors who looted the Company and were responsible for its
devastating collapse," said Blair A. Nicholas, a partner with
Bernstein Litowitz Berger & Grossmann LLP, co-lead counsel for the
institutional investor plaintiffs. "The Court's Order will enable
these sophisticated Lead Plaintiff shareholders, who have conducted
an extensive investigation of the Countrywide debacle, to formally
demand answers from Countrywide's officers and directors as to why
they caused the Company to commence a billion dollar share repurchase
program while at the same time selling their own shares to the
public," stated Mr. Nicholas.
Copies of the Court's decision, as well as the operative complaint
can be found at www.blbglaw.com/cases/countrywide_derivative.html
CONTACT:
Bernstein Litowitz Berger & Grossmann LLP, San Diego, CA
Blair A. Nicholas
(858)-720-3183
blairn@blbglaw.com
www.blbglaw.com