SEC Settles With Former Countrywide CEO Mozilo for $67.5 Million

Angelo Mozilo, co-founder of Countrywide, and two former Countrywide executives have agreed to pay out $67.5 million to the Securities and Exchange Commission (SEC) to avoid a trial on insider trading and civil fraud. Mozilo's trial was set to begin in federal court in Los Angeles this coming Tuesday. Mozilo’s financial penalty is the largest ever paid by a public company's senior executive in an SEC settlement. Mozilo also agreed to $45 million in disgorgement of ill-gotten gains to settle the SEC’s disclosure violation and insider trading charges against him, for a total financial settlement of $67.5 million that will be returned to harmed investors. Former Countrywide President David Sambol will repay $5 million in profits and pay $520,000 in civil penalties, while and former Chief Financial Officer Eric P. Sieracki will pay $130,000 in civil penalties. “Mozilo’s record penalty is the fitting outcome for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite—a looming disaster in which Countrywide was buckling under the weight of increasing risky mortgage underwriting, mounting defaults and delinquencies, and a deteriorating business model,” said Robert Khuzami, director of the SEC's Division of Enforcement. Both Mozilo and Sambol have also been permanently banned from serving as officers or directors of public companies ever again. The trio were accused of non-disclosure of the status of Countrywide's dipping mortgage portfolio.  For more information, visit www.sec.gov.