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Copyright (c) 2001
Stanford Law School


New Century Financial Corporation
Summary: On March 24, 2008, the plaintiffs filed an Amended Consolidated Class Action Complaint.

On September 14, 2007, the plaintiffs filed a Consolidated Class Action Complaint. The defendants responded by filing various motions to dismiss the Consolidated Class Action Complaint. On January 31, 2008, the Court entered the Order granting the motions to dismiss with leave to amend. According to the Order, Plaintiffs shall file an amended class action complaint by February 25, 2008.

On June 26, 2007 the judge submitted his order consolidating the related cases, appointing New York State Teachers Retirement System as lead plaintiff and approving their choice of Bernstein Litowitz as lead counsel. Plaintiff's have been given until September 14, 2007 to file their consolidated complaint.

On April 6, 2007 defendant New Century filed a notice of bankruptcy.

According to a press release dated February 9, 2007, the complaint charges New Century and certain of its officers and directors with violations of the Securities Exchange Act of 1934. New Century is a real estate investment trust that through its subsidiaries operates mortgage finance companies.

Specifically, the complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results and concealed the following material adverse facts from the investing public: (a) the Company lacked requisite internal controls, and, as a result, the Company’s projections and reported results issued during the Class Period were based upon defective assumptions and/or manipulated facts; (b) the Company’s financial statements were materially misstated due to its failure to properly account for its allowance for loan repurchase losses; (c) the Company’s financial statements were materially misstated due to its failure to properly account for its residual interests in securitizations by failing to timely write down the impaired asset; (d) given the deterioration and the increased volatility in the subprime market, the Company would be forced to tighten its underwriting guidelines which would have a direct material negative impact on its loan productions going forward; and (e) given the increased volatility in the subprime market, the Company had no reasonable basis to make projections about its ability to maintain its current mortgage loan production levels for 2007. As a result of these false statements, New Century stock traded at artificially inflated prices during the Class Period, reaching a high of $51.22 per share on April 28, 2006. Defendants took advantage of this inflation, selling 665,334 shares of their New Century stock for proceeds of over $26.6 million.

The complaint further alleges that on or around February 7, 2007, after the market closed, New Century announced that it will have to restate its consolidated financial results for the first three quarters of 2006 to correct errors the Company discovered in its application of generally accepted accounting principles regarding the Company’s allowance for loan repurchase losses. On this news, New Century’s stock collapsed $10.92 per share to close at $19.24 per share on February 8, 2007, a one-day decline of 36%, on volume of 25 million shares, 17 times the average three month volume.

INDUSTRY CLASSIFICATION:
SIC Code: 6798
Sector: Services
Industry: Real Estate Operations


COMPANY/ISSUER NAME: New Century Financial Corporation
COMPANY/ISSUER TICKER: NEW
COMPANY WEBSITE: http://www.ncen.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE
Avi Gold, et al. v. New Century Financial Corporation, et al.
 COURT: C.D. California  DOCKET NUMBER: 07-CV-00931
 JUDGE NAME: Hon. Dean D. Pregerson
 DATE FILED: 2/8/2007  SOURCE: Notice of Filing
 CLASS PERIOD START: 5/4/2006  CLASS PERIOD END: 2/7/2007
 TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
 PLAINTIFF FIRMS NAMED IN COMPLAINT:
  • Abbey Spanier Rodd Abrams & Paradis, LLP
      212 East 39th Street, New York, NY, 10016
       (voice) 212-889-3700, (fax) 212-684-519, info@abbeyspanier.com
  • Berger & Montague PC
      1622 Locust Street, Philadelphia, PA, 19103
       (voice) 800.424.6690, (fax) 215.875.4604, investorprotect@bm.net
  • Glancy Binkow & Goldberg LLP (LA)
      1801 Ave. of the Stars, Suite 311, Los Angeles, CA, 90067
       (voice) (310) 201-915, (fax) (310) 201-916, info@glancylaw.com
  • Green Welling LLP
      595 Market Street, Suite 2750, San Francisco,, CA, 94105
       (voice) (415) 477-6700, (fax) (415) 477-6710, gw@classcounsel.com
  • Kahn Gauthier Swick, LLC
      650 Poydras St. Suite 2150, New Orleans, LA, 70130
       (voice) (504) 455-1400, (fax) , lewis.kahn@kglg.com
  • Kaplan Fox & Kilsheimer, LLP (San Francisco, CA)
      100 Pine Street, 26th Floor, San Francisco, CA, 94111
       (voice) 415.772.4700, (fax) 415.677.1233, info@kaplanfox.com
  • Klafter & Olsen LLP
      1250 Connecticut Ave., N.W. Suite 200, Washington, DC, 20036
       (voice) 202.261.3553, (fax) 202.261.3533, info@klafterolsen.com
  • Law Offices of Marc S. Henzel
      273 Montgomery Ave. Suite 202, Bala Cynwyd, PA, 19004
       (voice) 610.660.8000, (fax) 610.660.8080, securitiesfraud@comcast.net
  • Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
      58 South Service Road, Suite 200, Melville, NY, 11747
       (voice) 631.367.7100, (fax) 631.367.1173,
  • Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
      655 West Broadway, Suite 1900, San Diego, CA, 92101
       (voice) 619.231.1058, (fax) 619.231.7423,
  • Mager & Goldstein LLP
      2825 University Drive, Suite 350, Coral Springs, FL, 33065
       (voice) 866-274-8258, (fax) 954-341-0855, jgoldstein@mwg-law.com
  • Murray, Frank & Sailer LLP
      275 Madison Ave 34th Flr, New York, NY, 10016
       (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com
  • Paskowitz & Associates
      60 East 42nd Street, 46th Floor, New York, NY, 10165
       (voice) 212.685.0969, (fax) 212.685.2306, classattorney@aol.com
  • Paskowitz & Associates
      60 East 42nd Street, 46th Floor, New York, NY, 10165
       (voice) 212.685.0969, (fax) 212.685.2306, classattorney@aol.com
  • Pomerantz Haudek Block Grossman & Gross LLP
      100 Park Avenue, 26th Floor, New York, NY, 10017-5516ven
       (voice) 212.661.1100, (fax) 212.661.8665, info@pomerantzlaw.com/
  • Roy Jacobs & Associates
      350 Fifth Avenue Suite 3000 , New York, NY, 10118
       (voice) , (fax) , classattorney@pipeline.com
  • Saxena White PA
      2424 North Federal Highway. Suite 307, Boca Raton, FL, 33431
       (voice) 800.361.5096, (fax) 888.782.3081, http://www.saxenawhite.com
  • Schatz Nobel Izard P.C.
      One Corporate Center, 20 Church Street , Hartford, CT,
       (voice) 860.493.6292, (fax) 860.493.6290, info@snlaw.net
  • Schiffrin Barroway Topaz & Kessler, LLP
      2125 Oak Grove Road, Suite 120, Walnut Creek, CA, 94598
       (voice) 925.945.0200, (fax) 925.945.8792, info@sbtklaw.com
  • Scott & Scott LLC
      P.O. Box 192, 108 Norwich Avenue, Colchester, CT, 06415
       (voice) 860.537.5537, (fax) 860.537.4432, scottlaw@scott-scott.com
  • Wechsler, Harwood, Halebian & Feffer, LLP
      488 Madison Avenue, New York, NY,
       (voice) 212.935.7400, (fax) 10022,
  • Zwerling Schachter & Zwerling
      845 Third Avenue, New York, NY, 10022
       (voice) 212-223-3900, (fax) 212-371-5969, inquiry@zsz.com
    _____________________________________________
     TOTAL NUMBER OF PLAINTIFF FIRMS:  22

  •  DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
    Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
    Type: Complaint Date on the document: 02/08/2007

    REFERENCE COMPLAINT
    In Re: New Century Financial Corporation Securities Litigation
     COURT: C.D. California  DOCKET NUMBER: 07-CV-00931
     JUDGE NAME: Hon. Dean D. Pregerson
     DATE FILED: 3/24/2008  SOURCE: Docket
     CLASS PERIOD START: 5/5/2005  CLASS PERIOD END: 3/13/2007
     TYPE OF COMPLAINT: Consolidated and/or Amended
     PLAINTIFF FIRMS NAMED IN COMPLAINT:
  • Bernstein Litowitz Berger & Grossmann LLP (New York, NY)
      1285 Avenue of the Americas, 33rd Floor, New York, NY, 10019
       (voice) 212.554.1400, (fax) 212.554.1444, blbg@blbglaw.com
    _____________________________________________
     TOTAL NUMBER OF PLAINTIFF FIRMS:  1

  •  DOCUMENTS FOR THE REFERENCE COMPLAINT
    Consolidated Class Action Complaint
    Type: Complaint Date on the document: 09/14/2007
    Order Granting Motions To Dismiss With Leave To Amend
    Type: Order Date on the document: 01/31/2008
    U.S. District Court Civil Docket
    Type: Docket Date on the document: 02/08/2008
    Amended Consolidated Class Action Complaint
    Type: Complaint Date on the document: 3/24/2008

     OTHER DOCUMENTS
    Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial
    Case Name and/or Number: Richard Damore, et al. v. New Century Financial Corporation, et al.
    Type: Complaint Date on the document: 02/09/2007
    Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
    Case Name and/or Number: Paul Wood, et al. v. New Century Financial Corporation, et al.
    Type: Complaint Date on the document: 02/09/2007
    Class Action Complaint for Violations of the Federal Securities Laws - Jury Trial Demanded
    Case Name and/or Number: IRA for the Benefit of Kathleen M. Karcic, et al. v. New Century Financial Corporation, et al.
    Type: Complaint Date on the document: 02/09/2007
    Class Action Complaint - Jury Trial Demanded
    Case Name and/or Number: Robert W. Boyd, III, et al. v. New Century Financial Corporation, et al.
    Type: Complaint Date on the document: 02/12/2007
    Class Action Complaint - Jury Trial Demanded
    Case Name and/or Number: Gerald Hammer, et al. v. New Century Financial Corporation, et al.
    Type: Complaint Date on the document: 02/12/2007
    Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
    Case Name and/or Number: Tom Benefield, et al. v. New Century Financial Corporation, et al.
    Type: Complaint Date on the document: 02/16/2007
    Order Denying Motion Of Lead Plaintiff For A Limited Modification Of The Automatic Stay
    Case Name and/or Number: In Re: New Century TRS Holdings, Inc.
    Type: Order Date on the document: 12/7/2007

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