New Century: The Final Word

It's almost the one-year anniversary of first major subprime bankruptcy, New Century Financial (NEWCQ.PK) -- a watershed event in the massive credit crisis gripping the U.S. economy.

New Century, which billed itself as a "New Shade of Blue Chip", appears to have been shady from the start. You can read Michael Missal's scathing 581-page report here, in which he places blame on New Century management, an inappropriate tone at the top, and reserves some stunningly harsh words for New Century's auditor, KPMG, citing that firm's inappropriate guidance for some of New Century's accounting woes.

All in all, Missal claims that New Century made at least seven glaring errors in GAAP, which were ignored by the KPMG audit team and that "unhealthy" friction between the Board of Directors and senior management kept the Board from being effective.