The former CEO of Countrywide Lending that we all loved to hate, Angelo Mozilo has settled with the SEC. The settlement will cost him big time: [Thanks L!]
Mozilo and the others were to face trial on the charges next week.
Mozilo agreed to repay $45 million in ill-gotten profits and $22.5 million in civil penalties. Former Countrywide President David Sambol will repay $5 million in ill-gotten profits and $520,000 in civil penalties, and former Chief Financial Officer Eric P. Sieracki will pay $130,000 in civil penalties.
Under the agreement, the three men did not admit wrongdoing. [Do you suppose he actually said “I agree to repay my ill-gotten profits, but I don’t admit to doing anything wrong?”]
As stiff as the penalties sound though, Mozilo will still profit handsomely from his “ill-gotten profits”:
The Securities and Exchange Commission accused the men of misleading shareholders about the quality of the loans on the Countrywide’s books. The civil complaint also accused Mozilo of acting on his inside knowledge of the company’s precarious state when he sold shares between November 2006 and October 2007 ahead of its collapse, reaping more than $139 million.
Even having to pay $77.5 million, Mozilo still nets $61.5 million, just between November 2006 and October 2007.
Maybe “crime doesn’t pay”, but one of the lessons of the housing bust is that fraud does.