Under the terms of the agreement, New Century will increase the size of its board to 11 members. David Einhorn, president of Greenlight, will be appointed to serve as a Class III director starting March 31. Also, New Century will allow Greenlight to increase its ownership to as much as 19.6% of the company's common stock. Shares of New Century gained $2.53, or 6.3%, to $42.85.
H&R Block (HRB - Get Report) fell on news that New York Attorney General Eliot Spitzer filed a civil lawsuit against the tax preparer, alleging the company "steered hundreds of thousands of its clients, including almost 30,000 New Yorkers," into IRAs that were "virtually guaranteed to lose money." Spitzer's lawsuit contends the IRAs contained hidden fees and offered low returns.
Mark A. Ernst, H&R Block's chairman and CEO, said in a statement that the company believes in the Express IRA products. Ernst said that if the matter goes to court, the company "will fight vigorously to defend the Express IRA product and ensure it remains available to our many clients who rely on it as a helpful savings option." Shares fell $1.02, or 4.6%, to $20.98.