Risk & Compliance

New Scrutiny for New Century

Following the disclosure of criminal and civil probes, the New York Stock Exchange determines that the subprime lender's common stock should be del...
Stephen TaubMarch 13, 2007

New Century Financial disclosed Tuesday that it is the target of criminal and civil investigations.

The New York Stock Exchange subsequently announced that it had determined that New Century’s common stock should be delisted, effective immediately. The company expects to be listed on the Pink Sheets following the suspension, the NYSE added.

On February 28, according to a regulatory filing, the embattled subprime lender received a letter from the U.S. Attorney’s Office for the Central District of California, indicating that prosecutors are conducting a criminal inquiry into trading in New Century securities and into accounting errors regarding allowances for repurchase losses.

New Century also received a grand jury subpoena requesting production of certain documents, it added.

In addition, the company announced that on Monday it received a letter from the staff of the Pacific Regional Office of the Securities Exchange Commission, which indicated that the SEC is conducting a preliminary investigation involving the company and that requested certain documents.

The staff of the SEC had previously requested a meeting New Century to discuss the events leading up to its previously announced restatement, according to the filing.

New Century stated that it intends to cooperate with the investigations.

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