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$624 Million Settlement of Countrywide Securities Class Action

This is a settlement for the Securities/Stock Fraud lawsuit.

New York, NY: A $624 million settlement has been proposed in the securities class action brought by the New York State Common Retirement Fund and the five New York City public pension funds against Countrywide Financial Corporation.

Under the proposed settlement, Countrywide would separately pay plaintiffs $600 million and the accounting firm, KPMG would pay $24 million, making the combined recovery one of the largest securities fraud settlements in U.S. history.

The Plaintiffs had alleged that Countrywide, one of the country's largest mortgage lenders, violated securities laws by making misstatements and omitting material facts about its policies and procedures for underwriting loans that entailed greater risk than disclosed. Thus, Plaintiffs contended that Countrywide had contrary to public assurances, exposed investors to excessive, undisclosed risk.

The $129.4 billion New York State Common Retirement Fund exists to provide benefits to the more than one million state and local government police officers, firefighters, employees, and retirees. It is the third largest public pension fund in the United States.

The New York City Pension Funds, consisting of the New York City Employees' Retirement System, New York City Teachers' Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund, and New York City Board of Education Retirement System, serve more than 700,000 active and retired New York City employees. With approximately $105 billion in assets, the City's funds are cumulatively one of the largest public pension funds in the United States.

The proposed settlement is expected to go before a U.S. District Judge, after which notice will be sent to all class members and then a final approval hearing will be scheduled, most likely in September, 2010. If finally approved, it will be the 13th largest securities class action settlement in the history of the Private Securities Litigation Reform Act.

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Published on May-7-10


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