Industry News

More layoffs at New Century

Auditor resigns as investigations of lender's books broaden

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With no buyer in sight, bankrupt subprime lender New Century Financial Corp. laid off 2,000 workers Thursday, leaving the company with a skeleton crew of 250 who will stay on the job as the company liquidates itself. Another 500 New Century employees who work in the loan servicing unit are also staying on the job as hedge fund Carrington Capital Management has purchased that portion of the business, the Los Angeles Times reports. New Century, which employed 7,200 last year, laid off 3,200 workers when it filed for Chapter 11 bankruptcy protection in April. Also this week, New Century revealed in a Securities and Exchange Commission filing that its former auditor, KPMG LLP, resigned on April 27, as regulators and lawyers representing shareholders and the lender itself examine the company's past accounting practices. The investigations center around New Century's failure to anticipate the number of loans it would be forced to repurchase, and the profits it claimed on loans that it ori...