If You Can Afford to Pay $67 Million, You Can Stay out of Jail…the Case of the Countrywide CEO
Tuesday, October 19, 2010
Dubbed the worst of the worst who helped cause the financial crisis, Angelo Mozilo has agreed to a settlement with the U.S. government for leading mortgage lender Countrywide—and a large part of the housing market—into turmoil. But the penalty—which doesn’t include jail time—isn’t quite so large when compared to the amount of money Mozilo made while serving as CEO of Countrywide, once the nation’s largest mortgage lender until its risky business practices led to collapse and a Bank of America takeover.
Without admitting guilt to charges brought against him by the Securities and Exchange Commission, Mozilo agreed to fines totaling $67 million—of which he will personally pay $22.5 million. This amounts to 16 cents for every dollar he made through fraud and insider trading, or $141.7 million, according to The Center for Public Integrity.
The other $45 million in penalties will be paid to former Countrywide shareholders. But Mozilo won’t foot this cost. Instead, it will be paid by Countrywide’s insurers and by Bank of America.
Crime Pays: The SEC's Slap on the Wrist for Angelo Mozilo (by David Callahan, Huffington Post)
How Countrywide Covered the Cracks (by Gretchen Morgenson, New York Times)
16 Cents on the Dollar: Doing the Math on Mozilo Settlement (by Michael Hudson, Center for Public Integrity)
No Prosecutions on Wall Street (by Noel Brinkerhoff, AllGov)
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