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NYSE suspends New Century trading

Subprime mortgage lender New Century Financial Corp, its financial footing crumbling, was all but kicked from the New York Stock Exchange on Tuesday, while federal investigations into accounting errors and trading of its stock intensified.

The NYSE suspended trading in shares of New Century and began taking steps to delist its shares from the exchange, citing the company's worsening financial prospects and allegations it has defaulted on obligations to lenders.

The exchange had halted trading of New Century shares on Monday, pending an evaluation of the company's financing efforts.

In a Securities and Exchange Commission filing on Tuesday, New Century said that it received a grand jury subpoena for "certain documents" as part of an ongoing criminal inquiry by federal prosecutors in California.

The Irvine, California-based company, which was founded in 1995, had grown into the second-largest US lender to homebuyers with poor credit histories. But like other subprime lenders, New Century has been struggling to secure the loans it needs to finance mortgages as the housing market has declined.

Last week, it stopped accepting all new loan applications because it has not been able to raise enough capital or renegotiate its existing financial agreements. It has since disclosed that all of its lenders have slashed funding or announced their intent to cut it off altogether.

The lenders have alleged the company failed to make payments.

Meanwhile, Massachusetts' top securities regulator on Tuesday also waded into the subprime lending plight, issuing subpoenas to UBS Securities LLC and Bear Stearns & Co in hopes of discerning whether the firms' research analysis ignored mounting financial problems at New Century and other subprime lenders.

New Century's dire financial straits fueled speculation that it might seek bankruptcy protection. Other subprime lenders, including Ownit Mortgage Solutions and Mortgage Lenders Network Inc, have done so in recent months.

New Century's stock has plummeted 96.8 percent since a 52-week high of US$51.97 last May. The stock traded last at US$1.66.
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