New Century Under Criminal Probe

New Century Financial Corp., Irvine, Calif., disclosed late March 2 that it is the focus of a criminal probe by the U.S. attorney's office in central California regarding trading in the company's securities and errors tied to its accounting for loan repurchases.In trading Monday morning, its share price was down 60% to just over $6. (Its 52-week high is $51.97.) In a filing with the Securities and Exchange Commission, the nation's second-largest subprime funder said it expects to violate certain warehouse lending covenants stipulating that it must earn a profit for a minimum of two consecutive quarters. New Century notes that lenders on six of its 11 warehouse agreements have executed waivers. The company says it currently has $13 billion in committed lending facilities and $4.4 billion in uncommitted borrowing capacity. Over the past six months, company insiders have sold 796,445 shares while buying none, according to Thomson Financial. New Century recently cut 300 jobs, or about 4% of its work force, including 124 positions in Orange County.