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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. | |||||||||||||||||
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| 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 | |||||||||||||||||
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| 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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