Conseco Inc. in February agreed to pay some shareholders $120 million to settle a class-action lawsuit charging that the Carmel, Ind.-based insurer published false financial results.Conseco, which did not admit any fault, is suing its insurers to establish who pays the cost of the settlement. The carrier is compensating investors who bought Conseco's shares between April 1999 and April 2000. During that period, the value of Conseco's shares fell to about $6 from around $30 over concerns that was inflating its earnings with "gain on sale'' accounting practices, booking profits on loan sales before they were earned.
Conseco restated its 1999 results in 2000 when it abandoned "gain on sale" accounting.
The pension funds leading the case against Conseco-the Anchorage Police & Fire Retirement System and the State of Louisiana Firefighters' Retirement System, the lead plaintiffs in the class-action lawsuit in the U.S. District Court for the Southern District of Indiana, Indianapolis Division.
Who will actually pay for the settlement is the subject of another legal battle. Conseco is suing its liability insurance carriers in a county court in Indiana, seeking to force them to pay.
Separately, Chuck Chokel, Conseco's CFO, was let go March 6. "His employment was terminated," CEO Gary Wendt stated "I let him go because I did not believe that he was up to the job."
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