Countrywide Financial employees participating in its 401(k)plan have filed a class-action lawsuit against the company, its CEO and those responsible for overseeing the employees’ retirement plan.
The suit, filed by Seattle-based law firm Hagens Berman Sobol Shapiro, alleges that while CEO Angelo Mozilo and the insider-appointed benefits committee members had a fiduciary responsibility to warn employees of the mortgage lending company’s financial health, they intentionally concealed information from plan participants.
According to the complaint, Countrywide offers two components in their employee 401(k)plan. The first is a participant contribution plan, where employees can make voluntary pre-tax contributions out of their base pay. The second aspect is a company match plan where Countrywide matches up to a pre-determined percentage.
For the latter portion of the plan, from October 27, 2005 until August 9, 2007, the match was made with the company’s shares.
Countrywide’s stock has dropped more than 60% from its 52-week high as a result of tightening credit markets, an increase in the number of home foreclosures and a weak U.S. housing market.
The suit makes several claims of wrongdoing by Countrywide and retirement plan administrators, including: failure to prudently and loyally manage the plan’s assets, failure to provide complete and accurate information to participants and beneficiaries, failure to monitor the compensation and benefit plan committees and provide them with accurate information, breach of duty to avoid conflicts of interest and co-fiduciary duty.
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