Irvine-based New Century Financial Corp.’s woes continued Tuesday with a stepped up investigation into stock trades and accounting errors and a pending delisting from the New York Stock Exchange.
The U.S. Attorney’s Office subpoenaed “certain documents” in its investigation into accounting errors and trading in New Century’s stock before the mistakes were disclosed, the company said in a filing Tuesday.
The Securities and Exchange Commission and the U.S. Attorney’s Office for the Central District of California started looking at New Century two weeks ago.
The SEC requested documents, New Century said, and asked for a meeting with the company to discuss the events leading up to the accounting error disclosure.
Separately, the New York Stock Exchange moved Tuesday to delist shares of New Century. The exchange suspended trading of the shares Monday. They’ve yet to resume trading.
New Century, which makes home mortgages to borrowers with imperfect credit, has seen its stock lose 90% of its value this month on speculation it’ll file for bankruptcy.
The company’s spiral started in February, when New Century warned of a loss for the recently ended quarter, projected a big drop in loans this year and said some 2006 results will be restated to fix accounting errors.
More recently, lenders that provide New Century with credit to make loans have cut off funding.
Investment banks that bought New Century loans packaged as bonds are triggering deal provision to have the company them back as loans go bad.
