Countrywide Financial Corporation Wins Complete Dismissal of $500 Million Securities Fraud Action

Cleary Gottlieb won a victory for mortgage company Countrywide Financial Corporation, which has been sued in multiple lawsuits, on June 17. The securities fraud action, which was filed by a hedge fund whose investment in Countrywide was once valued at over $500 million, alleged that Countrywide misrepresented its liquidity and viability prior to being acquired by Bank of America Corporation in 2008. In dismissing the complaint with prejudice, Judge Berman held that Countrywide “clearly disclosed” certain allegedly omitted information concerning one of its most-troubled mortgage products and that the hedge fund failed to allege that Countrywide knew its disclosures were fraudulent at the time they were made.