0
Execs Cashed Out as Subprime Giant Staggered
Irregular trades by execs at doomed subprime firm raise questions
By Rob Quinn
|
Posted Nov 26, 08 9:10 AM CST
|
Share
(Newser)
–
Bosses at one of the country's biggest subprime lenders made some suspicious stock sales as the firm's mortgages soured, a Los Angeles Times investigation reveals. Records show that executives at now-bankrupt New Century Financial sold nearly $20 million in company shares shortly after setting up new trading plans, often within days of each other. Such behavior "raises a red flag" for prosecutors, one expert said.
No charges have yet been filed against the execs but a source tells the Times that the trades are at the center of the Justice Department's ongoing criminal investigation of New Century. Ex-prosecutors predict that public outrage over the $700 billion bailout—and the resulting focus on executive compensation—will likely expand probes like the one into New Century's dealings across the financial industry.