January 28, 2016

January 20, 2016

Ocwen Financial Corp. will pay $2 million to settle charges that it misstated financial results by using a flawed, undisclosed methodology to value complex mortgage assets.  Ocwen inaccurately disclosed to investors that it independently valued these assets at fair market value according to U.S. Generally Accepted Accounting Principles. In fact, Ocwen merely used, and failed to review, the valuation performed by a related party to which it sold the rights to service certain mortgages.  In addition, the SEC found that Ocwen’s internal controls failed to prevent conflicts of interest involving Ocwen’s executive chairman who played a dual role in many related party transactions.  As a result, Ocwen’s executive chairman was able to approve transactions from both sides, including a $75 million bridge loan to Ocwen from a company where he also served as chairman of the board.  SEC

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