As mortgages went bad, New Century executives cashed out

[spindrifter]

By William Heisel L.A. Times
5:52 PM PST, November 25, 2008

The subprime lending industry was starting to buckle under the weight of bad loans in November 2006, when executives at Irvine-based New Century Financial Corp. held a conference call to release their latest earnings.

Loan volume was down and defaults were up, the earnings report showed, and in recent weeks at least five stock analysts had downgraded the company's shares. Moreover, four executives had sold nearly $20 million in stock in the last four months, six times as much as they had sold over the previous 12 months.

That led one analyst to ask whether there was anything investors should know.

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Those executive stock sales, however, have emerged as a central element in the Justice Department's criminal investigation of New Century, according to a person familiar with the inquiry who was not authorized to speak publicly.

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http://www.latimes.com/business/la-fi-newcent26-2008nov26,0,94233.story