Suit Questions Countrywide's Stock Options Practices

Lora Bentley

The stock option backdating scandal uncovered by the Wall Street Journal last year continues to drag on. Just yesterday, CFO.com reported that the Louisiana Municipal Police Employees Retirement System will be allowed to proceed with its "books and records" lawsuit against Countrywide Financial in a Delaware chancery court.

 

The retirement fund will raise questions about stock option grants that were apparently made when prices for Countrywide's stock were low. As an attorney for the retirement fund puts it, "Something looks amiss."

 

To compel the company to produce its books, the retirement fund must have "credible grounds to suspect wrongdoing," the story says. Countrywide, of course, admits no such thing. A hearing is set for April 18.



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