Countrywide sued by employees over loss in 401k

cruelpupet · 09-17-2007, 06:38 AM

Countrywide employees sue over loss in 401k

http://money.cnn.com/2007/09/12/real...ion=2007091213

Quote:

Countrywide workers sue over retirement plan
The mortgage lender's employees say the value of retirement accounts plummeted by millions as the company's stock fell.
September 12 2007: 1:43 PM EDT

LOS ANGELES (AP) -- Some Countrywide Financial Corp. employees sued the mortgage lender Wednesday, claiming they suffered heavy losses in their 401k retirement accounts after the company failed to warn them about the depth of its financial troubles.

The lawsuit, filed in U.S. District Court in Santa Ana, seeks class-action status and names as defendants Countrywide Chairman and Chief Executive Angelo Mozilo and benefits committee members in charge of the retirement plan, according to attorney Steve Berman, who is representing the plaintiffs.

He said employees decided how much of their salary to set aside in their retirement plan based in large part on their understanding of the company's financial health.

But those overseeing the plan failed to warn workers or intentionally concealed key information, the lawsuit claims.

"Most of these employees weren't risk-takers, rather claims processors and line staff who go to work every morning, putting a little away every month for retirement, or to finance a child's education," Berman said in a statement.

"With Countrywide's demise, they've seen their retirement funds decimated," he said.
Countrywide said to eye another bailout

A call to Berman seeking further comment was not returned.

The lawsuit claims Countrywide employees lost millions of dollars in retirement savings. It seeks unspecified compensatory damages.

A call to Calabasas-based Countrywide was also not returned.

Countrywide has been struggling as the housing slump led to a sharp rise in mortgage defaults and foreclosures, particularly among borrowers with subprime loans.

Countrywide (down $0.41 to $16.47, Charts, Fortune 500) shares fell 2.3 percent by midday Wednesday on the New York Stock Exchange. Its shares plunged from a 52-week high of $45.26 in January to a low of $15 in mid-August.

cruelpupet · 09-17-2007, 07:21 AM

Apparently they didnt learn from the Enron employees. Dont put all your savings into your employer. If the company goes under you not only lose your job, but your savings too. Hell it shouldnt even be invested in the same industry.

Not sure how I feel about the lawsuit. On one hand they got what they deserved, on the other, I dont think the CEO who is supposed to take responsibility for company failures like that to get paid at all.

Chgoman · 09-17-2007, 09:28 AM

Anyone who has paid any attention at all since 2000 has heard over and over again, don't put too much of your retirement in your own companies stock. It's sad they have big losses, but it was their own choice to put the money there instead of diversifying.

I guess they would rather have the company break SEC rules and provide them detailed information that would allow them to reallocate their investments based on non-public insider information.

zakia · 09-18-2007, 09:25 AM

Check out the recently updated www.eyeoncountrywide.info, an independent consumer resource examining sub-prime lending and Countrywide Financial Corporation

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09-17-2007, 07:21 AM	#2
cruelpupet Admiral Join Date: Jan 2001 Location: NYC Posts: 6,302	Apparently they didnt learn from the Enron employees. Dont put all your savings into your employer. If the company goes under you not only lose your job, but your savings too. Hell it shouldnt even be invested in the same industry. Not sure how I feel about the lawsuit. On one hand they got what they deserved, on the other, I dont think the CEO who is supposed to take responsibility for company failures like that to get paid at all.

09-17-2007, 09:28 AM	#3
Chgoman Lieutenant Commander Join Date: Apr 2002 Location: Mission Viejo, CA Posts: 696	Anyone who has paid any attention at all since 2000 has heard over and over again, don't put too much of your retirement in your own companies stock. It's sad they have big losses, but it was their own choice to put the money there instead of diversifying. I guess they would rather have the company break SEC rules and provide them detailed information that would allow them to reallocate their investments based on non-public insider information.

09-18-2007, 09:25 AM	#4
zakia Plebe Join Date: Sep 2007 Posts: 1	Check out the recently updated www.eyeoncountrywide.info, an independent consumer resource examining sub-prime lending and Countrywide Financial Corporation

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