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| New Century Financial Corp. disclosed in a Securities and Exchange Commission filing it is the subject of a criminal inquiry.
A letter received from the U.S. Attorney for the Central District of California by New Century on Feb. 28. indicates the government is conducting a criminal inquiry, a 10-K filed with the SEC Friday said. At issue is trading in the Irvine, Calif.-based company’s securities as well as errors in the accounting of the allowance for repurchase losses — which the company expects to significantly increase through the restatement process, according to the filing. “The U.S. Attorney’s Office is requesting voluntary assistance by the company, which the company has agreed to provide,” the document said. New Century also disclosed it would file its annual report late as a result of its financial restatement for the first through third quarters 2006. In addition, the audit committee of the board of directors “has initiated its own independent investigation into the issues giving rise to the company’s need to restate.” The real estate investment trust, which is battling shareholder lawsuits, said it is still trying to obtain waivers from six of 11 creditors that require a minimum of $1 million in net income for any rolling two-quarter period. “The company expects that it will not meet this requirement for the two-quarter period ended Dec. 31, 2006,” according to the filing. |
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Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com. e-mail:Â mtgsam@aol.com |
