Lawyers representing Countrywide Financial in a shareholder lawsuit alleging insider trading by company directors have sought a delay in the hearing to determine if there is enough evidence for the case to go forward, according to a report by Reuters.
According to documents filed with the U.S. District Court in Los Angeles, Countrywide wants the judge to determine if the case has sufficient evidence to go to trial before the under-fire mortgage lender gathers years-worth of data to prove their innocence.
But their delay has been referred to as a “blatant attempt” to shield company executives from shareholder claims that they feel will eventually be lost once Bank of America acquires the lender later this summer.
The shareholders, led by Arkansas Teacher Retirement System and Fire & Police Pension Association of Colorado, want Judge Mariana Pfaelzer to either speed up the case or set up a “constructive trust” so claims can be revisited even after the proposed merger is completed.
The suit seeks the return of insider trading profits which plaintiffs feel could boost the value of Countrywide stock and increase the potential buyout price by BofA, thus marking the need for expediency.
A hearing regarding the dismissal motion of the shareholder case is scheduled for April 28.
The Calabasas, CA-based home loan lender is also currently dealing with an SEC investigation involving CEO Angelo Mozilo’s stock sales, as well as other similar investor lawsuits throughout the country.
Investors and consumer advocacy groups are concerned that most of these problems will be swept under the rug if unresolved by the time the merger is completed in June, which is fast approaching.