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Compliance April 17, 2013
Countrywide Agrees to Settle with Pension Funds
April 17, 2013 (PLANSPONSOR.com) - Countrywide Financial proposed a settlement to a lawsuit over practices in the sale of mortgage-backed securities (MBS).
Reported by Rebecca Moore
The Orange County Employees Retirement System (OCERS) announced the plaintiffs have agreed to a global settlement of the matter with all defendants for a total recovery of $500 million in cash.
The class action lawsuit, filed in 2010 by several state retirement funds, charges that Countrywide used materially false or misleading documents to sell billions of dollars of MBS that were downgraded to junk bond status by 2008 (see “Pension Funds’ Suit Against Countrywide Certified as Class Action”). The class representatives include the Iowa Public Employees’ Retirement System, the Oregon Public Employees’ Retirement System, the Orange County Employees’ Retirement System and the General Board of Pension and Health Benefits of the United Methodist Church.
The settlement must be reviewed and approved by U.S. District Judge Mariana R. Pfaelzer of the U.S. District Court for the Central District of California.