August 2010 - In the New Century Financial Corporation class action a settlement has been reached with New Century Financial Corporation's officers and directors, KPMG, and its underwriters J.P. Morgan Securities, Deutsche Bank Securities and Morgan Stanley on August 9, 2010. Under the terms of the settlement, which has been preliminarily approved by Judge Pregerson of the Central District of California, plaintiffs will receive a total of $125 million. More than half, $65 million, will come from the officers and directors. KPMG will contribute $44.75 million, and the underwriters will provide the remaining $15 million. The settlement follows an SEC settlement with former New Century officers on July 29, 2010, which was described in this Bulletin on August 6, 2010.
November 15, 2010 - The court approved the settlements, entered the orders approving the plan of allocations, the motion for attorneys' fees and expenses, and dismissed the actions with prejudice.

November 8, 2010 - The court held a final settlement hearing.

August 10, 2010 - The court preliminarily approved the settlement.

December 3, 2008 - The court substantially denied the defendants' motions to dismiss.

June 2, 2008 - Defendants filed motions to dismiss.

April 30, 2008 - The lead plaintiffs filed a third amended consolidated complaint.

March 24, 2008 - The lead plaintiffs filed second amended consolidated complaint.

January 31, 2008 - The court granted the defendants' motions to dismiss and granted the plaintiffs leave to file an amended complaint.

November 20, 2007 - Another defendant filed a motion to dismiss.

November 2, 2007 - Defendants filed motions to dismiss.

September 14, 2007 - The lead plaintiffs filed an amended consolidated complaint on behalf of investors who purchased NEW common shares between May 5, 2005 and March 13, 2007. The lead plaintiffs allege that the defendants violated the Securities Act of 1933 and the Securities Exchange Act of 1934 by issuing false and misleading statements between May 5, 2005 and March 13, 2007.

June 26, 2007 - The lead plaintiffs and lead counsel were appointed and all cases were consolidated.

June 4, 2007 - Another lead plaintiff motion was filed.

April 11, 2007 - Additional lead plaintiff motions were filed.

April 10, 2007 - Lead plaintiff motions were filed.

April 6, 2007 - Defendant filed notice of bankruptcy.

February 16, 2007 - Another investor filed a complaint.

February 12, 2007 - An additional investor filed a complaint in the U.S. District Court for the Central District of California on behalf of investors who purchased New Century Financial Corporation (NYSE: NEW) common shares between April 7, 2006 and February 7, 2007.

February 12, 2007 - Another investor filed a complaint.

February 9, 2007 - Two additional investors filed complaints in the U.S. District Court for the Central District of California on behalf of investors who purchased New Century Financial Corporation (NYSE: NEW) common shares between April 7, 2006 and February 7, 2007.

February 9, 2007 - Another investor filed a complaint.

February 8, 2007 - An investor in shares of New Century Financial Corporation (formerly NYSE: NEW) filed a lawsuit in the U.S. District Court for the Central District of California against New Century Financial Corporation over alleged false and misleading statement made between May 4, 2006 and February 7, 2007.

According to a press release dated February 9, 2007, the complaint charges New Century Financial Corporation and certain of its officers and directors with violations of the Securities Exchange Act of 1934.

Specifically, the complaint alleges that between May 4, 2006 and February 7, 2007, defendants issued materially false and misleading statements regarding the New Century Financial Corporation’s business and financial results and concealed the following material adverse facts from the investing public: (a) the New Century Financial Corporation lacked requisite internal controls, and, as a result, New Century Financial Corporation’s projections and reported results issued during the Class Period were based upon defective assumptions and/or manipulated facts; (b) New Century Financial Corporation’s financial statements were materially misstated due to its failure to properly account for its allowance for loan repurchase losses; (c) New Century Financial Corporation’s financial statements were materially misstated due to its failure to properly account for its residual interests in securitizations by failing to timely write down the impaired asset; (d) given the deterioration and the increased volatility in the subprime market, New Century Financial Corporation would be forced to tighten its underwriting guidelines which would have a direct material negative impact on its loan productions going forward; and (e) given the increased volatility in the subprime market, New Century Financial Corporation had no reasonable basis to make projections about its ability to maintain its current mortgage loan production levels for 2007. As a result of these false statements, New Century Financial Corporation stock traded at artificially inflated prices during the Class Period, reaching a high of $51.22 per share on April 28, 2006. Defendants took advantage of this inflation, selling 665,334 shares of their New Century Financial Corporation stock for proceeds of over $26.6 million.

The complaint further alleges that on or around February 7, 2007, after the market closed, New Century Financial Corporation announced that it will have to restate its consolidated financial results for the first three quarters of 2006 to correct errors New Century Financial Corporation discovered in its application of generally accepted accounting principles regarding New Century Financial Corporation’s allowance for loan repurchase losses. On this news, New Century Financial Corporation’s stock collapsed $10.92 per share to close at $19.24 per share on February 8, 2007, a one-day decline of 36%, on volume of 25 million shares, 17 times the average three month volume.

New Century Financial Corporation is a real estate investment trust that through its subsidiaries operates mortgage finance companies.