Finance and Economic

MBIA Inc (MBI.N: Quote, Profile, Research) ousted Chief Executive Gary Dunton and replaced him with former CEO Joseph “Jay” Brown as the bond insurer scrambles to overcome mortgage-related losses, maintain a top credit rating and restore market confidence.

MBIA said Dunton, 52, resigned on Saturday, effective immediately.

Its stock rose about 1 percent in early trading.

Shares of the Armonk, New York, company have plunged 83 percent in the past year, and the company has had to sell equity to bolster its finances weakened by exposure to mortgage market losses. MBIA also is battling with high-profile investors betting against its shares.

Brown, 59, in a statement issued on Tuesday said he had spoken to New York State Insurance Superintendent Eric Dinallo, who is trying to broker a solution to the woes of MBIA and its rivals.

“I believe we can look forward to improved dialogue with the department,” Brown said in a statement.

In an interview with CNBC, Brown said he was optimistic that a deal involving New York state could happen in the next two weeks.

Between 1999 and 2004, Brown ran MBIA and its main unit, MBIA Insurance Corp pay day loans. He joined the firm as a director in 1986 and retired last May. 

Read more