Angelo Mozilo, the former chief executive of Countrywide Financial Corp, on Friday agreed to settle Securities and Exchange Commission charges that he misled investors of the former home loan giant, and engaged in insider trading to reduce his losses.
U.S. District Court Judge John Walter in Los Angeles announced in court that Mozilo would pay a $22.5 million civil penalty, plus $45 million in repayment of ill-gotten gains. He also agreed to a permanent ban on serving as an officer or a director of a public company. Mozilo had been scheduled to go to trial Tuesday in Walter’s court.
In addition to Mozilo’s settlement, former Countrywide President David Sambol will repay $5 million in profits and pay $520,000 in civil penalties. Former Chief Financial Officer Eric P. Sieracki will pay $130,000 in civil penalties.
Last year, the SEC filed a lawsuit accusing Mozilo and the other executives of failing to disclose the deteriorating state of the Calabasas company’s mortgage portfolio prior to the financial industry collapse. Mozilo also was accused of making roughly $140 million by selling much of his Countrywide stock between November 2006 and October 2007, before the truth became known.
Bank of America bought Countrywide’s operations for $2.5 billion in 2008 and suffered heavy losses as a result.
Mozilo and the other executives still face a criminal investigation by the U.S. Attorney’s Office in Los Angeles. All three men have denied wrongdoing.
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