I’m really waiting to see who else will join Madoff with “Racketeering”?
By Edvard Pettersson – Sep 17, 2010 12:01 AM ET
Countrywide Financial Corp. former Chief Executive Officer Angelo Mozilo must face trial on regulators’ claims he misled investors about risks tied to subprime lending, a judge ruled.
U.S. District Judge John F. Walter in Los Angeles yesterday denied requests by Mozilo and two other former senior Countrywide executives, David Sambol and Eric Sieracki, for a ruling that there were no genuine issues to be tried. The case is now set for a jury trial in October.
“It remains to be seen whether the Securities and Exchange Commission will be able to convince a jury that defendants’ statements were indeed misleading and material,” Walter said in his decision. “At the summary judgment stage, the judge’s function is not himself to weigh the evidence and determine the truth of the matter.”
The SEC sued Mozilo, 71, in June 2009, saying he publicly reassured investors about the quality of Countrywide’s loans while he issued “dire” internal warnings and sold about $140 million of his own shares.
Mozilo is the most prominent executive targeted by U.S. regulators examining the subprime mortgage crisis. He co-founded Countrywide in 1969 and built it into the nation’s biggest mortgage lender, helping trigger the subprime bubble by offering loans to customers with below-average credit scores.
‘Flying Blind’
He wrote in an e-mail that Countrywide was “flying blind” and had “no way” to determine the risks of some adjustable- rate mortgages, according to the SEC complaint.
You DO NOT want to be on this firms radar…they investigate Corporate Fraud and this is the 2nd firm to launch an investigation against DJSP Enterprises.
New York – May 28, 2010 – Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has been investigating DJSP Enterprises (“DSJP” or the “Company”) (Symbol: DJSP) for potential violations of the federal securities laws. Investors who purchased Company securities since April 1, 2010 may be affected.
On May 28, 2010, DJSP plunged by $2.59, or 29.2%, to $6.28 after the real-estate foreclosure services company posted weaker-than-expected first-quarter results and warned investors of a full-year earnings shortfall.
DJSP said it had a first-quarter adjusted profit of 35 cents a share, which was a nickel below the Thomson Reuters average estimate.
DJSP said that in April one of its largest bank clients initiated a foreclosure system conversion that cut the number of foreclosures. Because of the foreclosure system conversion and the U.S. government’s steps to prevent foreclosures, DJSP said it expects full-year earnings of $1.29 to $1.36 a share, which is below consensus. Volume topped 3.13 million shares, compared to the 50-day average daily volume of 190,000.
If you purchased DJSP publicly traded securities and would like to discuss our investigation, please e-mail us at mail@kaplanfox.com or contact:
Frederic S. Fox
Joel B. Strauss
Donald R. Hall
Hae Sung Nam
Jeffrey P. Campisi
Pamela A. Mayer
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
(800) 290-1952
(212) 687-1980
Fax: (212) 687-7714
E-mail address: mail@kaplanfox.com
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, California 94104
(415) 772-4700
Fax: (415) 772-4707
E-mail address: mail@kaplanfox.com
“I listened into the conference call. Lowered guidance in most situations comes from future problems down the pipeline. That isn’t the case this time. Lowered guidance this time is just a temporary setback. Company prices should be a discount of their future earnings — and in this case, the discrepancy between price and value appears to be fairly large right now. The main points:
In the Q&A section, someone yelled at David Stern for not disclosing this setback through an 8-K earlier. In my opinion, taking all things into consideration, David Stern has been making the right judgment calls. The future for foreclosure processing is brighter than ever.
There is currently a rumor circulating suggesting that foreclosure processing is being pushed back another thirty (30) days for mid-summer election purposes.
David Stern has been getting phone calls from his customers on a daily basis to make sure that DJSP has the capacity to handle a future ramp up in capacity.
Two of their largest customers are merging, and in my opinion, this is going to make Q2 and maybe the beginning of Q3 temporarily weak. That said, I would argue that DJSP is incredibly likely to continue working with this new merged entity and get the backlog of foreclosures that they have built up.
Fannie Mae (FNM) and Freddie Mac (FRE) have been touring the facilities to make sure that DJSP has the capacity to ramp up processing.
They are in the process of picking up a second REO customer in my opinion, but the time that it takes to ramp up here might push those earnings into Q1 2011 at this point.
I’m really waiting to see who else will join Madoff with “Racketeering”?
Continue reading…. BLOOMBERG
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