Countrywide Sued for Back-Dating Stock Options
Countrywide Financial Corporation, the nation's largest originator and servicer, is the latest corporation to be accused of back-dating stock options for its exectives. The New York-based law firm of Stull, Stull & Brody announced today that a shareholder lawsuit has been brought against members of the board of directors and other executive officers at Countrywide for improperly dating options offered to executives. The complaint alleges that certain current and prior officers and directors manipulated the prices of executive and director stock option grants, violating the company's option plan directives as well as state laws governing officer and director fiduciary duties, as well as numerous federal laws governing securities and taxation. Stock option backdating has become an area of focus for Wall Street and regulators, with more than 80 companies recently disclosing investigations of one kind or another into options mispricing. Back-dating of stock options -- one instance of mispricing -- permits directors, officers and/or executives to reap millions and billions of dollars which would otherwise belong to shareholders. Stull, Stull & Brody said it is investigating over fifty companies, including Countrywide, that have either received a letter of inquiry from the SEC, have been contacted by U.S. Attorney's Offices, are being investigated by the Justice Department and/or the Internal Revenue Service, have announced internal investigations or have otherwise been noted in media or public reports concerning their stock-option grant practices. Some companies already subject to litigation led by the law firm include Forrester Research, Inc., Staples, Inc. and real estate services giant First American Corporation.