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SEC Announces Distribution of $123 Million To Doral Financial Investors Harmed By Accounting Fraud

Company Name(s): 
Doral Financial Corporation

According to the U.S. Securities and Exchange Commission (“SEC”) investors who were harmed by fraudulent accounting and disclosure practices at Doral Financial Corporation are receiving $123 million in cash to compensate them for their losses. These funds include $25 million recovered by the SEC in an action brought against Doral Financial and $8.5 million in a related action brought against First BanCorp.

The SEC alleged that Doral Financial overstated income by approximately $921 million or 100 percent on a pre-tax, cumulative basis between 2000 and 2004 by improperly accounting for the purported sale of non-conforming mortgage loans and that First BanCorp aided and abetted Doral Financial's violations of the federal securities laws. The balance of the funds comprise payments made to settle related private litigation.

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