Plaintiffs led by the New York State Teachers' Retirement System, Albany, have agreed to a preliminary settlement against former officers and directors of New Century Financial Corp., as well as its auditor, KPMG, and several underwriters.
The preliminary settlement includes a payment of $125 million plus interest from defendants in a class-action suit filed in the U.S. District Court for the Central District of California, Los Angeles.
According to the settlement document, “numerous related” class-action complaints have been filed since February 2007 “alleging that the defendants violated federal securities laws by misrepresenting and failing to disclose adverse facts concerning New Century's business condition and financial results.” The suits were consolidated in June 2007 with the $76.5 billion New York State Teachers' Retirement System as lead plaintiff.
In return for receiving the settlement payment, plaintiffs agreed to drop charges against former officers and directors of New Century, the settlement document said; New Century was not named as a defendant because it had filed for bankruptcy.
New Century was a publicly traded real estate investment trust and mortgage finance company based in Irvine, Calif.