Countrywide facing shareholder lawsuit

Directors and officers of Countrywide Financial will have to defend themselves against “shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse” per the New York Times tonight.

Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.