US - A lawsuit against home mortgage lender Countrywide Financial Corporation and others, brought by New York pension funds, has been expanded to include additional defendants.
The class action alleges that Countrywide's material mis-statements and omissions regarding its lending practices, and other aspects of its business and finances, artificially inflated the price of the company's securities.
When this was revealed, stock and bond prices plummeted and investors lost money. The class action also alleges that Countrywide issued stock and bonds based on SEC filings that contained false information.
In a statement, New York State comptroller Thomas P. DiNapoli, said: Countrywide's underwriters had a duty to investigate whether Countrywide was acting honestly.
"Instead, the underwriters and accountants enabled Countrywide to release false statements. Investors lost millions, and New Yorkers lost their homes.
"We can't sit idly by; we need to recover the pension fund's losses and find a way to help all those families. This class action suit is the first step."
On 28 November 2007, DiNapoli and the New York City Pension Funds were appointed as co-lead plaintiffs in the class action suit.
The expanded suit includes ABN AMRO, A.G. Edwards & Sons, Barclays Capital, BNP Paribas Securities Corporation, BNY Capital Markets and J.P. Morgan.
This week's edition of Professional Pensions is out now
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