Friday, October 15, 2010

Countrywide's Angelo Mozilo Settles with SEC for $68 Million Fine

Criminal charges unlikely, no jail time.

Looks like it pays to have friends in high places, and particularly when you provide home loans to those friends on favorable terms.

Angelo Mozilo, CEO of Countrywide, of subprime fame, cut the deal with the SEC to settle the fraud charges by paying $67.5 million in fines.

CNN reports:

"NEW YORK (CNNMoney) -- Angelo Mozilo, the former co-founder of Countrywide Financial, has agreed to pay $67.5 million to the SEC to settle fraud charges.

"The settlement was announced Friday at a status conference in the case before U.S. District Judge John Walter in Los Angeles.

"Mozilo was slated to appear in the federal courthouse on Tuesday. But there were published reports in recent days that Mozilo and the SEC have been in confidential settlement negotiations over the past couple of weeks.

"Mozilo, along with former Countrywide president David Sambol and former CFO Eric Sieracki, were charged with defrauding investors by hiding the growing risks of the company's mortgages.
"The defendants denied the accusations, saying details about Countrywide loans were properly disclosed.

"The SEC accused only Mozilo of insider trading, alleging that he sold millions of dollars worth of Countrywide stock long after he knew the company was doomed.

"By settling the charges early, Mozilo could be more likely to avoid criminal charges that may have stemmed from standing trial on Tuesday."


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