Market volatility spurs class action
US - Employees participating in Countrywide Financial Corporation's 401(k) plan have filed a class-action lawsuit claiming the firm lost millions of dollars of their pension money during the recent market volatility.
The case is against the mortgage company, its CEO, Angelo Mozilo, and all those responsible for overseeing the employees' retirement plan.
Workers alleged illegal actions by the firm caused thousands of 401(k) plan participants to lose millions, after the company's stock plummeted when its financial situation became clear.
It was further alleged that while Mozilo and the insider-appointed benefits committee members had a fiduciary responsibility to warn employees of the company's precarious financial health, they hid information from plan participants.
Financial statements were also alleged to have been certified by Mozilo in an attempt to conceal the high-risk loans it was selling.
Steve Berman, the attorney representing the plaintiffs, said: "Most of these employees weren't risk takers, rather claims processors and line staff who go to work every morning, putting a little away every month for retirement, or to finance a child's education."
Countrywide Financial Corporation responded by saying that it had not yet seen the lawsuit, and did not generally comment on specific points of pending litigation.
A spokesperson said: " From what we can discern from the news release put out by the public relations firm for plaintiffs’ counsel, we do not believe the case has merit, and we will defend it vigorously.
“Countrywide values its work force, which we believe is among the most dedicated and talented in our industry, and we believe our 401(k) program is properly structured and provides competitive benefits to employee participants."
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