Posted by John_NorCal on 7/10/07 3:18pm
Msg #199238

Sub prime lender under full blown investigation......

As a Full-Blown Investigation Into New Century Collapse
Date: Friday, July 06 @ 07:45:00 CDT
Topic: Industry Scandals

The Securities and Exchange Commission (SEC) has raised the status of a preliminary probe into a full-blown investigation into the business practices of collapsed subprime lender New Century Financial Corp., giving the regulatory agency subpoena power.

New Century first announced in February that it would have to restate results for the first nine months of 2006 because of increases in loan buybacks.

On March 12, the Irvine, California-based company announced it had been notified of a preliminary investigation by the SEC.

Additionally, New Century was given a grand jury subpoena from the U.S. Attorney's Office for the Central District of California and became the subject of a criminal probe into stock trades and possible accounting errors by the New York Stock Exchange (NYSE).

Since filing for bankruptcy April 2, the failed subprime lender has sold off many key operations and eliminated more than 5,000 company positions.

Among those no longer with company is New Century co-founder and CEO, Brad Morrice, who resigned from the board of directors as the bankrupt lender terminated his employment to end his debatable role in the company’s collapse.

Beyond the criminal probes, New Century has been hounded by investors trying to maneuver as the company sells off its major assets.

Claiming the lender owes it $8.7 million, General Electric Capital Corp. made an effort to seize equipment such as its computer servers, telephones, and chairs from New Century, which argued that such a move would disrupt its efforts to wind down the company.

On June 21, New Century has indicated that the SEC has orally advised the lender's outside counsel of the establishment of a formal probe, according to a recent SEC filing.
The lender indicated that it was cooperating with the investigation.

Earlier in the month, U.S. Bankruptcy Judge Kevin Carey appointed securities enforcement expert Michael Missal to investigate any possible misconduct at New Century.

On June 29, New Century reported it had closed the sale of its mortgage servicing unit to Carrington Capital Management LLC at a final net sale price of $177.4 million, below the $184 million initially anticipated.