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18 Jun 2010

UK Hedge Fund SRM's Case Against Countrywide Dismissed

New York ( – London hedge fund SRM Global’s case against Countrywide Financial Corp, the mortgage lender acquired by Bank of America, was dismissed yesterday according to a Reuters article.

The hedge fund alleged that Countrywide was “flying blind” and had made misrepresentations and omissions, delaying disclosure of its problems in the U.S. housing market fall, Reuters said. The hedge fund said it lost nearly 90% of its value in 50 million shares of Countrywide common stock in 2008.

Manhattan federal court Judge Richard Berman said, “The hedge fund failed to plead facts showing a primary violation of the securities laws,” dismissing the lawsuit, which also identified Countrywide, Bank of America and former BOFA Chief Executive Officer Ken Lewis, former Countrywide Chief Executive Officer Angelo Mozilo, company President David Sambol and Executive Managing Director Eric Sieracki as defendants, the news source reported.

The three former Countrywide executives are also defendants in an SEC civil fraud lawsuit, Reuters said.