Institutional investors rebuff $624 million Countrywide settlement
Several institutional investors rebuffed a $624-million class-action settlement from Countrywide on Friday, saying the payout fails to recoup pension funds lost in the subprime debacle. One of Countrywide's investors — the state of Oregon, lost millions of dollars by investing state employee pension funds with Countrywide. Countrywide's stock plummeted in 2008 after the market became aware of risky subprime loans within its portfolio. Investors later filed suit, saying the mortgage giant failed to disclose the risk to investors. As the economic meltdown hit full-speed three years ago, Bank of America acquired Calabasas-based Countrywide, taking over its loan portfolio. The Oregon Attorney General reaffirmed this week that his state is opting out of the $624 million settlement. Instead, as an investor, Oregon is suing Countrywide on its own. The $624-million deal would shake out to roughly $500,000 in compensation for Oregon, a spokesman for the Oregon AG said. Rather than accept a settlement that will not recoup all of the pension losses, Oregon is going after the full $14 million in court. A California judge confirmed the big payout on Friday, making it the 14th largest securities class action settlement in the United States. The California Public Employees' Retirement System followed Oregon's lead and opted out of the settlement, saying it's not enough to compensate employee pensions losses, The Wall Street Journal reported. Those remaining in the settlement pool include the New York State Common Retirement Fund and five New York City public pension funds. Both of the organizations called the settlement good and fair in a statement. Write to Kerri Panchuk.