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Alan Cao, Quan Zhu and Jun Shi admitted to betting that Countrywide shares would decline after they learned the company’s results in the third quarter of 2004 would fall short of analysts’ forecasts, according to the United States attorney for the Central District of California, Reuters reported.
Each defendant pleaded guilty to one count of securities fraud, which carries a maximum 20-year prison sentence. The case stemmed from a investigation by the FBI, with the assistance of the Securities and Exchange Commission, prosecutors said, Reuters reported.
Cao was a former vice president for financial planning; Zhu was executive vice president for portfolio risk management; and Shi was first vice president for planning at Countrywide’s banking unit, Countrywide Bank, Reuters reported.
Donald Etra, a lawyer for Cao, said his client “fully acknowledges his responsibility,” was cooperating with prosecutors, and hoped for a probation sentence. Lawyers for Zhu and Shi did not immediately return calls seeking comment, Reuters reported.-New York State Society of Certified Public Accountants
Posted June 29th, 2007 by Alla
