Litigation Release No. 21117 / July 6, 2009

Accounting and Auditing Enforcement Release No. 3007 / July 6, 2009

Securities and Exchange Commission v. Doral Financial Corporation, Case No. 06-CIV-07158 (JES) (S.D.N.Y. filed September 19, 2006); Securities and Exchange Commission v. First BanCorp, Case No. 07-CIV-7039 (Crotty, J.) (S.D.N.Y. filed August 7, 2007)

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

The Securities and Exchange Commission today announced that 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. The claims administrator is Gilardi & Co. P.O. Box 8090, San Rafael, CA 94912-8090. For additional information, see LR-19837 (Sept. 19, 2006); LR-20227 (Aug. 7, 2007); LR-20721 (Sept. 17, 2008).