DiNapoli, Thompson to Lead Securities Fraud Suit
New York State and City Comptrollers to represent investors in
class action against Countrywide
New York State Comptroller Thomas P. DiNapoli today announced his appointment as one of the lead plaintiffs in a consolidated class action lawsuit filed against Countrywide Financial Corporation. The announcement follows the November 28 ruling by Judge Mariana R. Pfaelzer, of the United States District Court, Central District of California, naming both DiNapoli and New York City Comptroller William C. Thompson as lead plaintiffs.
“I’m pleased with the court’s decision. As two of the nation’s largest institutional investors, the State and City pension funds are in the best position to represent the interests of class members,” said DiNapoli who serves as sole trustee of New York’s $154.5 billion Common Retirement Fund (CRF). “Public corporations need to be held to the highest standards when it comes to transparency and disclosure of risks to their businesses. We believe that unlawful actions and omissions by Countrywide deprived investors of the information needed to make prudent decisions.”
Countrywide Financial Corporation, based in Calabasas, California, is one of the nation’s largest home mortgage lenders. The class action alleges that Countrywide’s material misstatements and omissions regarding their lending practices artificially inflated the company’s stock price. When the truth was revealed, the stock price plummeted and investors lost money.
DiNapoli believes that the CRF and the New York City Pension Fund lost tens of millions of dollars as a result of misleading statements and factual misrepresentations by Countrywide.
The comptrollers have chosen the law firm of Labaton Sucharow LLP, a firm with extensive experience in large securities fraud cases, to serve as lead counsel.