$624 Million In Countrywide Financial Litigation Is One Of Largest Securities Fraud Settlements Ever

The New York State Common Retirement Fund and the five New York City public pension funds have settled the Countrywide Financial Corporation Securities Class Action for $624 million. Under the proposed settlement, Countrywide would pay the plaintiffs $600 million and the accounting firm KPMG would pay $24 million, making the combined recovery, if finally approved by the court, the 13th largest securities class action settlement in the history of the Private Securities Litigation Reform Act. 

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.