Former executives at New Century, which went bankrupt early last year, should be sued and so should it’s auditor KPMG. That is what a bankruptcy investigator is recommending. New Century as you may recall was the No. 2 sub-prime lender before it went down in flames in the Spring of 2007. An excerpt from Yahoo! Finance:
Michael J. Missal, a Washington, D.C. attorney appointed by a bankruptcy judge to probe years of accounting missteps by Irvine, Calif.-based New Century, said the company’s leaders turned a “blind eye” to the increasing risk of making loans to people with bad credit.
Operating out of a “brazen obsession” with cranking out mortgages, New Century ignored an alarming rise in signs of trouble with it loans, Missal said. He found the company engaged in seven improper accounting practices, including one that some witnesses said was recommended by KPMG.
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on Mar 26th, 2008 at 3:27 pm
Shailesh - Great post. You always seem to find the interesting quotes. I’m not surprised that New Century’s in the news again. Do you remember how much they spent at the national conferences on marketing? They went wild! They were extremely hungry for more mortgages as default rates increased.
Keep up the great work!
on Mar 26th, 2008 at 6:30 pm
Hey Tyler,
Thanks for stopping by. I try to keep abreast of some of the breaking news - I like to follow that stuff myself, so if I see something interesting, I post it right away.
New Century was the leader of the pack when it came to aggressive subprime lending. They also fell fast too.