Srm relied on these alleged misrepresentations and

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SRM relied on these alleged misrepresentations and purchased 5.5 million shares of Countrywide common stock. After a statement made by Mozilo, in response to an analyst report, claiming that Countrywide was not at risk of going bankrupt, SRM purchased more than 10.5 million additional shares of Countrywide Common Stock. In October of 2007, markets dropped
and Countrywide filed a Form 8-K showing quarterly losses and write-downs. In February of 2008, Countrywide filed a Form 10-K disclosing that its ARM loans that were past due at least 90 days had increase 800% and the principals on those loans were increasing. In a teleconference with SRM, Countrywide’s Investor Relations employee, Bigelow, and Sieracki confirmed Countrywide’s previous statements and told SRM that Countrywide had sufficient liquidity to last 12 months. Based on this information, SRM purchased over 8.4 million additional shares of common stock. In January of 2008, Bank of America (BofA) announced it would be purchasing Countrywide in an all-stock transaction for $4 billion, less than 30% of Countrywide’s most recently reported book value. SRM executives met with Countrywide executives in June of 2008, where Mozilo told SRM that Countrywide became non-viable in July of 2007 and Sambol told SRM that liquidity disappeared in August of 2007. SRM sued Countrywide, Mozilo, Sambol, and Sieracki in NY federal district court under the Securities Exchange Act section 10(b) and Rule 10b-5 and common law fraud. SRM’s suit focused mainly on an email between the three

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