KPMG in US Settlement Deal Worth $24 Million
KPMG may have to pay out $24 million to investors of Countrywide Financial Corp.
Initial court approval has been awarded for the $624m (£392) settlement that the Bank of America and KPMG may have to pay out to investors.
KPMG is the official auditor for Countrywide Financial Corp and they were responsible for signing off the financial statements from 2005 to 2006.
KPMG is responsible for paying out $24 million to the investors. Bank of America is responsible for paying out the lion’s share of $600 million.
Mariana Pfaelzer, the US district judge, ruled on the judgement yesterday in Los Angeles. According to a Bloomberg report, a fairness hearing regarding final approval for the settlement will be held. This was announced in May this year.
Five New York City pension funds and the New York State Common Retirement Fund had claimed that the former Countrywide chief executive officer, named Angelo Mozilo and some other executives of the company hid the fact from investors that the company was receiving was fuelling its growth by letting the standards of underwriting deteriorate.
Bank of America had acquired Calabasas, California- based Countrywide, which is the biggest U.S. home lender, in the month of July 2008.